Pat Rabbitte (Dublin South West, Labour)

We are still a sovereign Government and no Minister, including the Minister for Finance, has come in here and explained to the House why, on day one, the Government included long-term subordinated debt in the terms of the guarantee. It was remarkable. It was picked up very shortly afterwards on these benches by my party leader, Deputy Gilmore, and my colleague Deputy Burton, but we have never had an answer as to why subordinated debt was included.

Mr. Desmond's proposals at least contain a built-in incentive to get credit flowing again. He said:

The Government could achieve exactly the same impact by €60 billion of bonds issued by the banks themselves, with the Government underwriting them. The Government can then charge a completely transparent fee for the use of this guarantee. This leaves all the risk of the existing loans with the existing capital providers and could be implemented in the morning without quangos, complicated legislation or additional risk.

If Mr. Desmond was handling this himself I doubt if he would settle for a transparent fee, but we could deal with that. The taxpayer would have to get a substantial equity position in return for the substantial risk that they would be taking in guaranteeing this new debt to be issued by the banks.

If it is true that Mr. Desmond's input has been with the Department of Finance for a number of months, as Deputy Kenny said this morning, it bears out that once the Government settled on the NAMA approach it would not entertain alternative proposals, contrary to the public protestations of Ministers. Instead the Minister embraced a proposal from a private consultant with no particular qualifications in banking. However, he did have experience as a stockbroker and as a director of a development company.

The process has legal advice from a company of solicitors which is also advisor to one of the banks and several property developers, and the valuation process will be guided by an advisor whose previous role was selling property to and for developers. NAMA is a particularly Irish solution. A Government which says it is opposed to nationalisation establishes a State quango on the advice of a former developer and stockbroker which will be advised on valuation by a man who helped create the bubble and advised by a company of solicitors with so many Chinese walls that their offices should be ringed by rickshaws.

Whatever the differences are in the House between the parties, there are some questions to which we need answers. We need answers on what the plan is for Anglo Irish Bank and who will write the cheque to whom on the interaction between it and NAMA. Is one wing of the State writing the cheque to the other wing? How in the name of God was it permitted for a small bank, captured by friends of Fianna Fáil, to grow and grow like topsy until it threatened the entire banking system?

We have never had an explanation-----

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