Brian Cowen (Laois-Offaly, Fianna Fail)

The approach has to strike a balance between those who are outside the formal economy and those who are not. When there are thresholds in respect of activity and VAT exemption, the position of businesses which are just above those thresholds and which must submit themselves to the regulatory burden must be taken into account. We must not create unfair competition for those who may obtain an exemption but who may well be involved in such a sufficient level of activity that they should be included in the formal economy. We should not accommodate more informal trades and professions which do not give rise to a very high level of activity. A balance between the two must be maintained. We must continue to work on this matter. I referred to a particular project, which is not in isolation from the regulatory impact assessment system we have in place. This is having an effect.

We have built up a financial services industry which has, in the main, retained its good reputation internationally. Obviously, issues that arose recently have had a reputational and detrimental impact on a particular institution. Competitors have since had an opportunity to indicate that this situation is typical when it is, in fact, more likely to be atypical.

We continue to contend with the financial crisis and world capital market values are estimated to have evaporated to the tune of between 33% and 50% in the past 12 months. A regulatory regime that can keep pace with the level of financial innovation we have witnessed, which has caused the global systemic problem that is undermining consumer, investor and business confidence and which has greatly depleted the potential for worldwide economic growth, is required. There is clearly a need, both regionally within the European Union and at a global level, to provide the type of response commensurate to the damage currently having such effects in terms of the worldwide recession which is impacting severely on emerging and developing countries no more than the advanced economies.

One would be remiss not to accept that there are serious lessons to be learned in terms of how business is to be facilitated and the proper functioning of capital markets is encouraged with the trade and investment flows that derive from that, and the benign impact of that on quality of life and standards of living for many people in terms of a functioning trading system. That must be balanced against the need to ensure we do not have a shock of such systemic impact that we have seen recently that puts at nought much of the progress achieved in recent times. That is a balance that must shift to a far greater regulatory oversight than was deemed suitable or appropriate in the past, given the consequences with which we are trying to cope.

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