Brian Lenihan Jnr (Dublin West, Fianna Fail)

I agree with Deputy O'Donnell. The most important matter is to ensure resumption in the flow of credit from the banks to the economy and those who wish to borrow money for consumer, commercial and business purposes. That is the core objective of all our work here.

There has been a great deal of concern voiced by the Deputy, me and others to the banks about the flow of credit to viable businesses. There is a great deal of evidence of cash flow financing difficulties. Falling demand for credit has played a role but the perception of limited credit availability is very damaging at a time of fragile business and consumer confidence. That is why the Government decided to conduct an independent review of bank lending to provide an accurate picture of the current position of bank lending to small and medium sized enterprises in Ireland, and that review will report within a short time frame.

AIB and Bank of Ireland have agreed to fund this independent review, which will be managed jointly by the banks, Government and business representatives. Consultants will be appointed to conduct the review in the coming days. I agree with Deputy O'Donnell. I am not sure that changing the provisions of this legislation would have any impact on this issue. I am not satisfied it will but I share his concern and it is something we have to address. It is the most important issue of all.

Regarding Deputy Burton's amendment, she wants the ministerial direction to be cleared in advance by the Houses of the Oireachtas. I considered this amendment carefully. The Bill provides that the Minister for Finance may give directions to the NPRF Commission only in circumstances where the Minister is of the opinion, having consulted the Governor of the Central Bank and the Financial Regulator, that the direction is needed to remedy a serious disturbance in the economy or prevent serious damage to the financial system.

The Minister for Finance must have that power without having to go to the House in advance. The details of any investment will emerge in the annual report or can be elicited by way of a parliamentary question, but the power must be given to the Minister to make the actual decision because it is made to remedy a serious disturbance in the economy or prevent serious damage to the financial system. It is important that a Minister can act urgently in such circumstances.

Under the credit institutions legalisation, the Minister could transfer funds to the NPRF for the purposes of investing in a listed credit institution in the context of recapitalisation, without any resolution of the Houses. Therefore, the Minister can follow an indirect route to secure the same objective. In those circumstances, I do not see any great advantage in accepting the amendment proposed by Deputy Burton, although I understand and accept the spirit in which she tabled it. I agree it is a fine question.

Clearly, were I to exercise power under the credit institutions legislation it would show in the Exchequer statements. Under this legislation it would be shown in the annual report or be elicited by way of a parliamentary question.

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