Eamon Ryan (Dublin South, Green Party)

I want to set out the deep roots of this real crisis. It is a crisis in our banking system which started several decades ago when it moved from being a system that tended to lend short against short-term deposits. It moved into the mortgage business which was using short-term deposits paying for long-term loans. It became even worse when banks, collectively, moved towards a system where managers and staff were given quarterly and monthly targets to reach in selling products and issuing loans. One cannot assess risk and allocate capital on such a targeted base.

It became particularly flawed in the likes of the model adopted by Anglo Irish Bank. As Deputy Bruton said, short-term funding from outside of the State was paying for very long-term property developments. We have had a systematic failure in the systems of corporate governance, regulation, auditing and, yes, in public policy which for many years saw bricks and mortar in the property bubble as real progress in our State when it was not. While it may have been an important supply of shelter to people, it was not wealth generation as so many public policy decisions seemed to believe.

There was a fundamental reality behind the Government's approach. Such is the interconnection between our banks with shared customers, there were only three options open to the Government. One was to provide a guarantee, as was done in September. The other was to proceed with nationalisation, which is being done today as it is seen as necessary. The third option — that of letting a bank collapse — would have forced the other stable banks to call in their loans, like a fire sale in a burst property market bubble, which would have systematically threatened them. It is that simple reality that was behind the decision on the guarantee in September and today's decision.

The capitalisation issue was complex but it was better to have considered it over recent months. The UK Government made the mistake of rushing in with a capitalisation programme which yesterday had to be completely reconfigured. It was better to take our time and consider the PricewaterhouseCoopers, Jones Lang LaSalle and other reports.

See this speech in context