Brian Lenihan Jnr (Dublin West, Fianna Fail)

I met him yesterday afternoon and we will not argue over what he said. It is important to bear in mind that he endorsed the policy of the Government of a blanket guarantee. He said that was the first essential step taken in the Swedish crisis. He said, rightly, that capitalisation is very important and this is a step we have taken with regard to AIB, Bank of Ireland and Anglo Irish Bank. He mentioned nationalisation with regard to ownership structure and we have nationalised Anglo Irish Bank and do not rule out larger stakes in the other banks if the scale of the losses requires it.

On the question of taking distressed assets and asset disposal, it was a technique he mentioned as one of the techniques to resolving a banking crisis. We decided because of the small size of Ireland and the scale of the development loan book that it would be better to take the performing as well as the non-performing loans to give NAMA a continuing income which will help with operating costs. The Deputy mentioned the word, "negotiations". There are no negotiations with the banks. This is a public policy that is being implemented. So far as I am concerned, all that happens with the banks is discussions about how we are going to proceed with that public policy. The banking crisis here is a very serious problem for which the banks share a great part of culpability and it is essential from a public interest point of view that the Government lays down policy in this area to restore the banking sector to rude good health as quickly as possible.

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