Ned O'Keeffe (Cork East, Fianna Fail)

It is important that small shareholders be looked after. I am a shareholder in both of the banks in question. Many people have depended on their dividends in recent years. I know of several wheelchair users who invested their money in organisations like the banks, but have no incomes now and are dependent on the State for their security and livelihood. This is a sad state of affairs. We must get the banks back on stream soon.

Nationalisation has been mentioned, but that is rubbish. No good has ever come from nationalisation because it removes incentive from people's work. Moreover, we would need to pay shareholders, even though the price may be small, and take on the banks' large debts. What occurred to the banking system is clear, namely, that there was too much competition in the system. On 9 July, my party was taken aback by a speech I made in the House because I stated that we should have higher levels of capital gains tax on developments.

After the Northern Rock problem came Bear Sterns, Lehman Brothers and AIG, the insurance company, in the USA. The whole world fell inwards. It was not all our fault. A small open economy surrounded by water, we were the victims. Competition meant it was like buying boots and shoes, in that one could go up and down a street from one bank to another, submit a proposal to build 50 houses in one place and buy 40 acres up the road. Foreign banks would say, "Fine", but they are now taking their money back, as we can read in the newspapers every day. If people went to the local bank with which they always dealt, it would have told them that it could not lend the money and they would show the letter from the foreign bank saying that it would. The local bank had no choice.

We landed ourselves in this trouble. It is ridiculous that we were building 90,000 houses per year for a population of less than 4.5 million people. No one on either the left or right side of the House said, "Stop". Shopping centres, hotels and business parks were being built on tax breaks. It was unreal. I stated this clearly, but I was seen as having the wrong view. That we were going to go astray was as obvious as the nose on my face. I must blame the Opposition as much as the Government because it is meant to keep us on our toes. There was a game of poker between McNamara and Dunne in Ballsbridge. Many other property developers were doing the same. This is what landed us in this trouble. Competition in the banking system was the problem. Unjustified figures for properties and land were being thrown around and nothing was done.

I have a problem with Sinn Féin's ideas on nationalisation, but it is a small party. If its comments were popular, the entire country would vote for it.

The matter of internal auditors will definitely get into the Guinness Book of Records. The internal auditor of the Commission of the Houses of the Oireachtas has retired or resigned. It is the first internal auditor I have ever heard of who resigned. Where we went astray was with the internal auditors. Internal auditing that forms part of a company's financial structure must be sorted out. Internal auditors are usually appointed by management and the chief executive will have a say in the internal audit. Until such time as internal auditing is set aright, it will be no good.

I come from Mitchelstown, which had a fine co-operative society that got involved in development. We had three directors from Dublin, Mr. Michael Jacob of Anglo Irish Bank, Mr. Liam McGreal of where I do not know and Mr. John Fitzgerald, the famous former Dublin city manager. They were involved in directing a company called Reox, which is facing liquidation and bankruptcy and has destroyed Mitchelstown, Mallow and north County Cork, as the Acting Chairman is aware. I went hoarse giving out about it because I knew what was occurring. Mr. Fitzgerald was a Dublin city manager and received more directorships. There is no point in appointing bank directors if they do not have good business backgrounds or if they have failed elsewhere, and they have failed. There is no advantage in appointing directors from government into banks. If they do not know where they are going, they are wasting their time. I am not friends with any bank director and no longer know any. Let shareholders appoint directors and interrogate them more at annual general meetings. AGMs of banks and businesses have become a joke where one cannot ask a question without being shouted down. That situation must be sorted out. The standing orders in those places have been changed, but whether we can change in this House, I do not know.

As I stated one year ago, auditors are a disgrace. They have put us where we are. If the auditing system does not change, we will go nowhere. The structure of appointing auditors is suspect because they are appointed before an AGM.

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