Joan Burton (Dublin West, Labour)

Similarly, Irish Nationwide was the other example of a building society which was behaving in an incredibly risky business manner. All the institutions which are covered by this deposit guarantee scheme will face the same requirements concerning the scheme. Surely, however, it would make sense that if a bank is engaging in a risky or bad business model, it should be more penalised than a bank which is being more conservatively governed, and therefore perhaps not making the exotic income and returns that, for example, some of our credit institutions were claiming and which then crashed so spectacularly.

Section 4(4) refers to the bank advising the Minister, but the critical thing is whether that information gets out to the market. Historically, in all the institutions dealing with credit in public authority in Ireland - the Department of Finance, the Central Bank and the regulator - we have seen an extraordinary reluctance to be in any way openly critical. Mr. Hurley, the governor of the Central Bank, has attended various committees and if one reads the small print it states in words to the effect, "I did warn...", but who will notice in the stampede of a bubble? It is like the footnote on travel insurance that people do not examine.

What will the bank do now about the actions that are set out in the subsection concerning the adequacy of internal controls, including procedures relating to risk management and mitigation, and arrangements for financial stabilisation? That is the core reason why Anglo Irish Bank went down the tubes. That was the job of the regulator, but under this legislation it will now be the primary job of the Central Bank, even if part of the task may be given to whatever form of modified regulator we have in future. I would like the Minister to comment on that.

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