Billy Kelleher (Cork North Central, Fianna Fail)

I welcome the opportunity to speak on this Bill. In an economic context this legislation is the most important to come before the House in many years. In the debate in the House we are getting to the bottom of the challenges that face the country. Some of the commentary over the summer was unhelpful, misleading, misguided and based on populist party politics but at least we are getting to the nub of the problems facing this country in the context of the supply of credit and addressing the impaired balance sheets of our financial institutions.

Last September, the Government provided a guarantee to depositors and lenders of the systemically important banks in Ireland. This was a brave decision, supported by some but not all parties in this House. Unfortunately, people used the opportunity to go down the populist route but we are all very well aware of the difficulties that we face as an economy, particularly the financial institutions in the country which are its lifeblood as they provide credit to small and medium sized businesses and to people who want to purchase homes or want access to credit. This is why we are here debating the National Asset Management Agency Bill, which is critical to address the impaired balance sheets of the systemically important banks.

Last week, the Minister for Finance outlined how NAMA will work in the context of valuations of loans and the percentage of haircut on the loans. More importantly, we must accept one premise. The lending that went on prior to the difficulties was, in a way, irresponsible but it was based in a time of continued growth and access to cheap credit internationally, and the banks were using wholesale money markets to borrow credit in the short term for long-term lending into the property market in Ireland. That was fine until the international credit crisis occurred. It is a bit disingenuous for people to point out that all of these difficulties are as a direct result of Government policies of recent years. If the international credit crisis had not occurred the property market in this country would have had a softer landing.

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