Alan Shatter (Dublin South, Fine Gael)

As everyone knows we are confronted by an unprecedented economic and banking crisis. It affects every walk of life, every person in this country, and there are many who currently believe themselves to be immune who will discover as we go through the devastating effect of what is happening during 2009 that it is knocking on their front door and back door, and impacting on them, their family or their relations.

Over the past six months I have despaired of the manner in which both the Government and the banks approached the crisis with which we are confronted. It could be best described as being met with arrogance, hubris, greed and incompetence, and I would apply each of those to both the Government and banks in turn.

It seems that the Government is incapable of owning up to its mistakes and recognising that not only do we have a global crisis but there has been a total failure of economic policy and direction by, in particular, Deputy Cowen, as Taoiseach and when he was Minister for Finance, by the Government led by the previous Taoiseach, Deputy Bertie Ahern, and a similar failure by this Government. One of the reasons we are in difficulty internationally is not simply that the banks lack credibility. There is a lack of international confidence in the competence of those in government managing the economy.

The same applies to our banks. They have made decisions that were intended to generate unsustainable and enormous profits to the benefit primarily of directors and bank employees at executive level, to generate fees and to make loans available in circumstances where, I suspect, people had a far closer eye on the so-called "compensation" or bonuses they were to receive than on the viability of the projects for which money was being loaned.

It seems that neither the Government nor the banking sector has the capacity to accept responsibility and recognise their accountability. As in the words of the song, "sorry seems to be the hardest word", but it should not be.

The first thing to which the general public is entitled is an apology from the Government and an apology from those in charge of our banking system, and from the bank regulatory system which has utterly failed the public interest in the context of events now being disclosed. There is a credibility deficit, a competence deficit and a confidence deficit. We need to restore confidence in our governing system, in our regulatory system and in our banking system, and we need to restore competitiveness to our economy.

I do not believe that the Government has the capacity to do that. I have no faith in any of the information we are being told about our banking system, indeed, no faith in the Minister's speech today. There is one sentence I want to quote from that. In the context of dealing with the AIB and Bank of Ireland recapitalisation, he stated: "A careful assessment was made of the potential losses that the banks face on their loan books in the coming years, taking into account the impact of likely trends in property values and various stress scenarios for the economy." It is on the basis of this careful analysis that this recapitalisation programme is before this House. This very day Bank of Ireland indicated that it has increased its forecast of possible losses on its property loans to €6 billion over the three years to March 2011. The previous estimate was €3.8 billion. I want to hear in the reply to this debate whether it was the €3.8 billion or the €6 billion on which the Minister relied in the context of the "careful assessment" that was undertaken.

In most other democracies those responsible for the economic policies that have contributed to the destruction of a state's economy would have long since resigned.

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