Eamon Gilmore (Dún Laoghaire, Labour)

The reaction of most people today to the news that the Garda has gone in to search the offices of Anglo Irish Bank is that it is about time. I do not want to say any more on the issue for the reasons that have been stated.

The priority we all have to address, one on which we all agree, is the necessity and imperative of restoring confidence in the Irish banking and financial system. We must also be honest, however, about what is eroding the confidence in Irish banks and the banking system. A contributing factor has been the incremental release of information, in particular about what went on in Anglo Irish Bank. We also have deficiencies in the regulatory set-up and the political supervision of this set-up by Government. We know about the back-to-back arrangement between Anglo Irish Bank and Irish Life & Permanent, on which PricewaterhouseCoopers reported in October. The Minister for Finance did not read the report at the time and did not find out about it until January when the matter was drawn to his attention. When he found out about the arrangement he did nothing until 10 October when it became public knowledge, at which point we had a flurry of activity with the board being called in, executives resigning and so on.

At the weekend, a most extraordinary report, one I find hard to believe, was published in The Sunday Tribune. The newspaper has indicated it has seen transcripts to confirm its report that the financial director of Anglo Irish Bank, Mr. Willie McAteer, told the head of our Financial Regulatory body, Mr. Neary, at a meeting in September that the bank would be "managing" its balance sheet, in other words, cooking its books. According to The Sunday Tribune, Mr. Neary responded with the words, "Fair play to you, Willie."

The Sunday Tribune report also states that staff in the Office of the Financial Regulator were informed in a telephone call from officials of Anglo Irish Bank in October, made after the guarantee was put in place, that the bank was manipulating its balance sheet and the balance sheet did not represent a real number. The newspaper also reports that a senior civil servant, who is described as working closely with the Minister for Finance, Deputy Brian Lenihan, assured Irish Life & Permanent that he understood why it was necessary to carry out the back-to-back transactions and that there was no need for concern over these arrangements. Has the Taoiseach checked if these stories are true? Has he asked the Minister for Finance about them? What can he tell the House about them?

I agree with the Taoiseach that we have to restore confidence in Irish banks. Part of the process of restoring confidence in Irish banks, particularly Anglo Irish Bank, is to identify if wrongdoing took place and, if so, to have it dealt with. Another part of the process is to restore some confidence in the regulation of Irish banks. I would like to know if the story which appeared on Sunday is accurate and what steps the Taoiseach or Minister for Finance have taken to check if it is true.

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