Beverley Flynn (Mayo, Fianna Fail)

I, too, welcome the opportunity to speak on this motion and I agree with much of what the Minister, Deputy Ryan, has stated.

The reality is that the banking system in Ireland today is frozen. No business is being done. Companies are going out of business every day, time is of the essence and unfortunately we cannot afford to wait. I note Deputy Bruton's point that the Government should take care and not rush. The reality, however, is that many businesses have been experiencing an enormous starvation of credit for more than six months and cannot, unfortunately, afford to wait any longer.

Nationalising the banks will not solve our problems, and neither will limited recapitalisation. We have already nationalised Anglo Irish Bank and that has not changed anything as regards the capital or the funding requirements within that bank. One result of that nationalisation is that the State will be taking full responsibility for the funding requirements of Anglo Irish Bank for the future. The Government has stated that in terms of recapitalisation it may well be that the €7.5 billion promised is not sufficient. It has also stated that if further moneys are required then we will be taking equity stakes in the various banks, which may well result in a majority shareholding for the State in these banks.

There is plenty of international evidence to the effect that nationalising banks has proven to be very poorly regarded. International evidence shows that government owned banking systems serve their economies very poorly, resulting in higher interest rates and less private credit, with what credit is available going to larger firms. Even Deputy Bruton stated that state owned banks can come under political influence. The Opposition are not united in their approach to bank nationalisation.

Greater state ownership has been associated in many countries with greater crisis in financial sectors. In Ireland, we are trying to achieve a commercially focused independent banking sector. State ownership is the last resort and always should be viewed as such.

The National Asset Management Agency is not the friend of the banks because it will require banks to crystalise their losses on their balance sheets. Neither is it the friend of property developers. However, NAMA can be very good news for the Irish taxpayer. Given the effort the Government is putting into the running of the agency, over time it can be a profitable operation for the Irish taxpayer.

We want to see Irish banks getting back to doing day to day business for small business people and mortgage holders. At present, that is not happening. We want to see better regulation in the banking sector.

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