Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

I thank my colleague, Deputy Morgan, for sharing time with me. On the day that taxpayers are asked to put €7 billion into the Bank of Ireland and Allied Irish Banks, parents, children and teachers across this State are devastated that special needs teachers will be withdrawn from children who desperately need them and all for a paltry so-called saving of €7 million. It speaks volumes of the mentality of the Government that it should impose such a cut on the most vulnerable children in our education system. To put this saving in context, the chief executive of the Bank of Ireland was paid €3 million in 2007. How many multiples of the so-called €7 million saving has he and others like him pocketed in salaries and bonuses over the course of their bank careers, yet we are expected to applaud his virtue and that of his cohorts for taking a pay cut? We will have to be forgiven if there is not a loud cheer.

What has been happening yesterday and is happening today is almost unbelievable. We are being asked to trust the Government and the banks as €7 billion of public money is poured into the two largest financial institutions in this State. This is being asked of us by the Minister for Finance the day after he made the extraordinary admission that his Department knew last October of the fraudulent €7 billion transaction between Irish Life & Permanent, that he did not read the relevant section of the PricewaterhouseCoopers report and, most bizarre of all, that, when he did know, he did not tell the Dáil about it on 20 January when he asked us to nationalise Anglo Irish Bank.

I find it extraordinary that the Minister sought to justify this by saying that to tell the Dáil about the €7 billion merry-go-round transaction would have been to undermine confidence in banking as it would be revealing customer detail. It was as if we were talking about a citizen and his or her meagre savings account. What he withheld was the truth about what can only be described as a — I have used this language already — fraudulent transaction involving the very same amount of money that we are being asked today to pump into Bank of Ireland and Allied Irish Banks.

That fraudulent transaction between Irish Life & Permanent and the Anglo Irish Bank raises another very serious question. Was it a one off or did that end of year cooking of the books happen before with these or other financial institutions? Has it been a practice in Irish banking that has yet to be exposed? We need to know this. We also need to know the position of the regulator in all of this and I emphasise "all of this". Either the regulator did not know, which was bad, or else he knew and did nothing about it, which was even worse.

As I pointed out on the Order of Business and as Deputy Morgan said in his contribution, Irish Life & Permanent is now claiming in this morning's edition of The Irish Times that it informed the Financial Regulator of its dodgy deal, the €7 billion transfer in September between it and Anglo Irish Bank, within days of it being carried out. In our view, this is a very serious matter that warrants address by the Minister and warrants it quite quickly — today. We need to know if what Irish Life & Permanent is claiming is factual. If it is true, it completely undermines confidence in the Financial Regulator. Let us be clear, Anglo Irish Bank falsified its accounts; it transferred moneys to IL&P and then got it to transfer the moneys back so that Anglo Irish Bank could falsely present its accounts and that transaction as a customer deposit. We need the Minister to answer those questions.

As I stated yesterday, when the Central Bank and the Financial Services Regulatory Authority Bill was debated on Second Stage in this House seven years ago, I pointed out then that not only did the Central Bank allow the DIRT fraud to flourish, it lobbied the Government of the day not to intervene, claiming such action would cause a flight of money out of the economy, or so it told us. If the Central Bank was prepared to turn a blind eye on that matter what other matters was it equally prepared to overlook? What other failings were in its operations?

Here we are, seven years later, obliged to ask the same question about the very regulatory regime that was brought in as replacement during the course of that 2002 legislation. This was the new regime that was trumpeted and lauded and was going to change everything. However, it is clear that it has failed miserably. Yesterday the Minister indicated a promised tightening of regulation. I have no confidence in this Government's real intent in this regard. There is no evidence to show that it is sincere, or that its traditional bonhomie with those captains of the financial institutions is any different today than it has been at any time in the past.

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