Brian Lenihan Jnr (Dublin West, Fianna Fail)

I am examining whether it will be possible, in respect of the bank in which the State is a shareholder, to publish the maximum amount possible, consistent with the protection of the necessary confidentiality which must exist between a customer and a bank in an institution which we now own, and to do that when the annual report is published.

The report contains 120 pages on each of the financial institutions. I was briefed extensively on it. The focus was on the quality of the loan books because understandably, our concern was to ensure what exposures arose in the institutions there in terms of our guarantee. The deposit issue was noted but described as an issue to be taken up by the Department and was so taken up. I cannot give the House a finalised view on the reason for the transaction today. It is clear that there were major liquidity support operations mounted between institutions in the past year but to the extent that this may have gone beyond that activity it is a serious matter and will require a comprehensive explanation from the parties concerned. Those investigations are ongoing and I cannot prejudge them.

On a more constructive note, I agree with Deputy Ó Caoláin that it is of fundamental importance that we reform the regulatory system. I will listen to all sides of the House in the progression of that reform. The current architecture and system did not serve the country well when it entered this financial crisis. The arrangement which was arrived at, whereby the Central Bank was co-located with the Financial Regulator but each operated autonomously, does not appear to have served the country well in recent months and years. It is known in the public domain that the Central Bank assessed the dangers of excessive lending long before the regulator but was unable to force its will in that regard. There has always been a demand for a separate system of financial regulation because of the fear that a central bank would be concerned primarily with prudential considerations but whatever may have happened, it is essential that we devise a structure that commands public confidence for the future. Many of the decisions that will have to be taken in that regard relate to men and women, rather than measures, but measures may be required as well.

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