Brian Lenihan Jnr (Dublin West, Fianna Fail)

I will try to deal with the points raised by Deputies in so far as I can. I thank them for their contributions to a very brief debate.

Deputy Bruton suggested that I was accusing the Opposition of irresponsibility. I am not accusing him of irresponsibility in respect of this legislation. All the Deputies mentioned the guarantee. The current legislation provides for the guarantee to end at the end of September 2010. That creates significant problems for the medium-term funding of Irish banks in terms of the senior debt they can acquire. This is not debt to be advanced to them on a speculative or hazardous basis but the routine funding requirements of the banks. That difficulty has arisen because other European countries have also explicitly or implicitly guaranteed their banks.

Deputy Burton dramatises the night of 29 September in many of her public contributions but every European country has now explicitly or implicitly guaranteed its financial institutions. The terms of those guarantees in many other European countries have enabled guarantees to be given to the banks beyond our expiry period of September 2010. It is important that our banks be put on an equal playing field with other banks. That is the purpose of taking this power. It cannot be exercised without positive approval in this House. There is no question of entering a commitment of any kind before there is positive approval in this House. There is no question either, as some Deputies suggested casually, of underwriting existing borrowings by the financial institutions.

If the Commission approves a proposal from the Irish Government and if it is brought to this House, the terms of that proposal will apply to debt issues subsequent to the adoption of the proposal by this House. We will have plenty of opportunity to discuss this matter in the event that the EU Commission approves of the approach the Government is taking. Therefore, the scope of the power is not unlimited. It is limited by the essential and positive approval of this House.

I was glad to see an amount of critical comment in the newspapers about the announcement in respect of the Central Bank and IFSRA because it is not at the heart of the regulatory reform.

At the heart of that reform, as I announced in the budget, is the need to ensure that whoever heads up the regulator commands total confidence and produces a radical change of culture in the operation of banking regulation in this country. To recruit the new regulator we have engaged Sir Andrew Large, a former deputy governor of the Bank of England, to preside over the recruitment process.

To produce a regulator one must have a job specification. Therefore, I brought proposals to the Government to provide for certain essential changes required in the legislation so we know exactly, in terms of appointing a candidate as regulator, what is the job specification. I did not bring forward those proposals as a final solution to the problems of our regulatory system and many commentators made the point that tinkering around with the regulatory system would not resolve our problems. I agree but, at the same time, when one is in the process of recruiting a regulator it is important to set out the legislative framework into which that person will be slotted.

Deputy Bruton raised the question of university pensions and the fact that we are shouldering commitments. I can confirm that the State was effectively liable for the liabilities of the pension funds being transferred and, as such, they do not constitute an additional liability. This important point was also raised by Deputies Burton and Rabbitte and we are already shouldering these commitments. With regard to the question of auditing what we will receive, I assure Deputies that a full actuarial assessment was made at my Department on the various securities and interests that will be transferred. Deputy Burton met my officials last Friday and I regret that she was not able to see the final calculations she had wanted until lunchtime today.

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