Richard Bruton (Dublin North Central, Fine Gael)

I move amendment No. 2:

In page 5, after line 40, to insert the following new section:

"3.—Nothing in this Act shall permit the extension of any guarantee under this Act or Credit Institutions Financial Support Act 2008 to any form of Tier 1 or Tier 2 risk capital as defined under the Basel II Capital Adequacy Framework.".

This is an attempt to delimit the authority of the Minister to issue guarantees on behalf of the Irish taxpayer. Under the existing scheme there are certain types of deposit, including unsecured debt and asset covered securities, to which the taxpayer has provided a guarantee. I seek to exclude what I would regard as risk capital. Perhaps my drafting has let me down in that I think some tier 2 instruments are covered by the guarantee but many are not. The intent of this is to narrow it and not allow the Minister to stray into new areas of guarantee such as forms of predominantly risk investment to which the taxpayer has no reason to offer the comfort of a guarantee. Predominantly these were professional investors who invested in what proved to be disastrous banking practice in the Irish economy, the consequences of which have brought ordinary people to their knees, and there is no way in which we should allow under the cover of this legislation the extension of the guarantee beyond where it is already.

In amendment No. 13a I seek to confine the extension to new issues rather than simply allowing everything that was already limited to September 2010 potentially to be rolled on by the Minister. This would give the Minister a more selective and forensic tool whereby certain new issues could be provided with a guarantee - I would like to hear the conditionality about the issues that would be offered the guarantee - but that generally the €400 billion would not be pushed out to an unspecified date in the indefinite future. Confining it to new issues would meet the concerns of Deputy Ardagh as it would involve financial instruments that we feel are sensible and strengthen the banking infrastructure and it would not be global.

In this group of amendments I seek that it would require a resolution of the House for the Minister to make an order extending the date. From hearing what the Minister has said already I do not believe that he will be of a mood to support it. While I am on my feet, I would like to request clarification from the Minister on his belief that he has the powers under section 5, which are confined strictly to the September deadline. These are the powers that match the responsibilities the taxpayer is taking. When the guarantee was issued the taxpayer shouldered all of these responsibilities but the Minister stated that he wanted to have powers over the same period to do anything that would be deemed necessary. According to my reading of the legislation, those powers to do anything that would be deemed necessary will lapse in September 2010 but our guarantee will proceed into an indefinite future about which we do not know and I do not see why the responsibility to shoulder this would not be matched by the power to do whatever we feel necessary to curb abuses by banks or to do whatever the Minister and his advisers deem necessary. Will the Minister elaborate on how he feels so certain that he has the power to do anything deemed necessary without section 5?

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