Joan Burton (Dublin West, Labour)

I had asked about the deposit guarantee scheme in April 2008. The Taoiseach, then Minister for Finance, replied:

I would remind the Deputy that, as I have mentioned in response to previous similar questions, the first and most robust line of defence for depositors must be a well-managed system of prudential regulation and supervision so as to try to minimise the risk that a DGS needs to be activated. Recent assessments by bodies such as the IMF have confirmed that the Irish regime for financial regulation complies with best international practice.

It was apparent that officials in the Department of Finance, under the leadership of the then Minister for Finance, had their heads firmly wedged deep in the sand. When I asked questions earlier, in January 2008, I was told by the then Minister for Finance that everything was rosy in the garden. It is extraordinary that the previous Minister for Finance, his immediate predecessor, Mr. McCreevy, and Fianna Fáil in government have led the country to this pass.

Not only has the system of regulation failed. I accept that the Governor and staff of the Central Bank and Financial Services Authority of Ireland have worked night and day on this crisis. However, over a two-year period prior to the crash questions were asked about this matter in the House. When they came before the relevant committee to answer such questions, the Governor of the Central Bank and Financial Services Authority of Ireland, representatives of the Financial Regulator and the Secretary General and senior officials from the Department of Finance continually stated the fundamentals were fine, that Ireland possessed the best regulated system in the world, etc.

When introducing the Bill today, the Minister indicated that we were now in the best of all possible recovery modes. These matters are being dealt with in a way that is completely delusional. The Minister has presented the Bill as if it is some magnificent achievement. For the average taxpayer, however, it represents confirmation of the fact that this generation and that which will succeed it will be responsible for repaying a national debt of extraordinary proportions.

The Minister has a number of serious questions to answer about NAMA and Anglo Irish Bank. We have been posing questions about Anglo Irish Bank and the regulation of the banking system in general. We were continually informed that all was well and it was indicated to us that asking such questions was somehow not in the national interest and represented a failure to wear the green jersey. What action is the Minister taking in respect of bond holders? The difficulty with Anglo Irish Bank is that because the guarantee given by the Minister was so wide, unilateral and uncontained, the people are up to their necks in hock with international bond holders.

Other parties chose not to question the extent of the guarantee given to the banks. I am not referring to the principle that ordinary deposits should be guaranteed because the Labour Party was the first to suggest the deposit guarantee scheme should be significantly increased. We have been obliged to repeatedly ask the Minister the same question, namely, what is his view of the bond holders? Will he follow the lead of Allied Irish Banks and Bank of Ireland by ordering Anglo Irish Bank to buy back the debt for as little as 60 cent or 40 cent in the euro?

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