Dáil debates

Wednesday, 16 September 2009

National Asset Management Agency Bill 2009: Second Stage

 

4:00 pm

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)

My speech is being circulated, along with an information pack of supplementary documentation that I have made available to the Deputies. In the history of this State, few subjects have been debated more intensively and more passionately than the Government's proposal to establish a National Asset Management Agency. Since I published the draft legislation on 30 July last, there has been a fast and furious debate on the airwaves, in the print media, on websites, at public gatherings, at a lengthy Oireachtas joint committee meeting two weeks ago and, I am sure, in many households throughout the country. This is as it should be. It is impossible to overstate the fundamental importance of the resolution of our banking crisis to our economic recovery. A clear understanding of why our banking system got into this crisis is of the utmost importance. We must learn lessons from this crisis. We must and will take the necessary steps to ensure we never make the same mistakes again. I accept the good intentions of most contributors to the debate. Some of the commentary was ill-informed and some of it, from those who should know better, was mischievous. Many constructive suggestions and amendments have been proposed, however, and the Government has taken on board the best of them. I emphasise that I am open to further constructive amendments from Members of this House which will improve the Bill and protect the citizens of the State.

Much of the debate has centred on the risk involved in NAMA. I wish to make it clear that the resolution of the banks' difficulties involves risk the private sector will not take. That is why the Government, like governments throughout the world, has had to step in. Another risk that has been less prominent in the debate is the risk to the taxpayer of paralysis and delay. If we do not act now to free our banks of their higher risk loans, we will not be in a position to benefit from the economic recovery that appears to be emerging in the United States and in Europe. Without a healthy and functioning banking system, our businesses and service providers will not be able to grow and develop their products for our main markets. If we do not stand ready to take advantage of a global upturn, as an open free market economy dependent on foreign direct investment and international capital flows, we will lose market share and jobs. That is the very real risk confronting our economy. As the time for debate comes to an end, the Government has a duty to act. Our proposal to establish an asset management agency has received the endorsement of the International Monetary Fund and the European Central Bank. It is clear that our proposal enjoys credibility in the financial markets. Since it was announced, the cost of borrowing by the State has fallen by 1.5% for ten-year money, which is tangible evidence that the Government's strategy is working. I note that NAMA has received the endorsement of two of my distinguished predecessors, Mr. Ray MacSharry and Mr. Alan Dukes, both of whom sat at the desk I currently occupy at another period of great peril for this country's economy. In light of their record of service during difficult periods, their assessment is deserving of our respect. The citizens of this country are understandably angry about the state of the banks, bitterly disappointed by the failure of our regulatory system and appalled by the details of the reprehensible behaviour of people in the financial and property sectors, in whom they placed their trust.

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