Joe McHugh (Donegal North East, Fine Gael)

It was important that Deputy Lee was able to get in the points as regards current mortgage holders and I am delighted e has put that on the record.

The Taoiseach and the Government seem to believe that the challenge is to restore the banking system, whereas we on this side of the House want to change it fundamentally. We want to change the way banking is practised and the way regulation is supposed to be done. Anyone who believes this NAMA legislation will change the culture of banking is either naive or gullible. The Taoiseach said at the IPA national conference on 9 September that we have to restore our banking system to full functioning so that credit is available to businesses and households, trade and investment and the jobs depending on them can proceed. I take issue with the "full functioning" aspect. Is that a declaration that the banks were fully functioning prior to the banking crisis? I disagree with that initial premise because I do not want the banking system to go back to the way it was, giving out free money, 100% and 110% mortgages. The banking system as it operated has crippled my generation, a generation of people with nooses around their necks with €500,000 to €600,000 mortgages, and people are absolutely frightened to death to hear reports that the French and German economies are coming out of recession because they know that interest rates will go up. That is why I am delighted Deputy Lee raised the point about mortgage holders because there is nothing in the NAMA plan to give them protection.

At the Fianna Fáil think-in this week the Taoiseach said we must fix the banks as quickly as possible and get them back lending. Where was the decisiveness 12 or 18 months ago, when small businesses were going to the wall and there were articles about high street businesses in Letterkenny, Drogheda or other major towns where the blood was being sucked dry from local economies and the only businesses surviving were Lidl, Aldi, Tesco and Dunnes Stores? That is the reality of what is happening and that decisiveness was not there.

The Tánaiste referred to the "gratefulness" of the banks and the Minister for Finance, Deputy Brian Lenihan, said yesterday that the banks needed to be grateful as regards the job we are about to do in relation to the NAMA legislation. This was like parents telling a delinquent teenager that he or she better be grateful for the sacrifices they made in raising him or her into the twilight teenage years. The banks are the delinquent ones, however, and delinquent teenagers or delinquent banks do not do grateful. There is no point in the Minister imploring the banks to be grateful because it is like water off a duck's back.

In Britain the debate has moved on from recapitalisation. Already there is controversy over bankers receiving bonuses again. The old culture is back and old habits are finding it very hard to die. As regards the political debate that is not happening in this country, the discussion now taking place post capitalisation in the UK and America has changed from the question of whether it is a socialist or capitalist model that is in place. Here the Minister for Finance is about to inject the socialist ideal, getting every single taxpayer to bail out the banks. Once they are bailed out they will revert to the capitalist model and the old culture that was in place as regards protecting the banks, their shareholders, the brokers and the bondholders.

The Minister for Finance told a Sunday newspaper last weekend that throughout this banking crisis the onus is on the banks to attract private investment. This is on the record. The Minister said they had not been able to attract private investment and that he could not wait forever. How does the Minister know the banks have not been able to attract private investment? How do we know banks have not been offered fresh capital for some of their toxic loans in the past 12 to 18 months? Does the Minister have access to information showing that banks were prepared to negotiate with potential investors in the past 12 to 18 months or were the banks just waiting for the NAMA train to come along? Given the 50% drop in property prices, including commercial property and development land, would it not be prudent for an international investor to look at Ireland as a good investment?

In order to justify this legislation, the Minister should provide evidence of banks having negotiated with potential investors. I believe a sinister vacuum has been created by banks through lack of transparency and honesty. The Minister needs to back up his statement that they have not been able to attract any private investment. Does he mean there is no evidence of any type of international investors or bidders interested in some type of property having approached banks? The Minister needs to clarify that statement which is very dangerous based on his communications with the banks. He said that they have not been able to attract any private investment and that he cannot wait forever. Let the Minister stand over that comment by coming in here and stating that neither AIB nor Bank of Ireland has had any approaches from international investors for the purchase of any property in their toxic balance sheet. He should produce that evidence because it could raise a few issues.

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