Michael D Higgins (Galway West, Labour)

I believe that the Bill before us regarding the National Asset Management Agency is the most important legalisation that will probably come before the Dáil in the next decade or decades, raising, as it does, issues not only for this generation of taxpayers but also issues for future generations. It touches on an issue of inter-generational justice. Surrounding this Bill there has been a neglect of its implications are. Any detailed analysis of the Bill has been replace by a kind of myth-making in which many have participated, which suggests that the NAMA legislation, as proposed by the Government, is, as has been put in some of the media, "the only game in town".

I would like to begin by raising a few questions which are notable in the Minister's failure to answer them or to be addressed in the Taoiseach's speech. The first question is why a Joint Oireachtas Committee on the banking system has not been established. At one stage the Minister for Finance, Deputy Lenihan, seemed disposed to such a committee. The issues are how we came to this position, what were the decisions taken and what were the great failures of regulation. The suggestion is that we can move on without addressing them. The Oireachtas Committee should be sitting now and addressing the issue. The public want it addressed.

The myth which covers for that failure is the suggestion that somehow or another, we were all guilty of an excess of spending or whatever and that this produced the financial crisis. It is very difficult to have published the basic fact that 2,000 individuals make up €77 billion of what we are dealing with in regard to toxicity. There are 150 individual borrowers who are responsible for €50 billion and Anglo Irish Bank and Irish Nationwide, the heads of which have now gone, are responsible for €32 billion. A question of the first order in the public mind is why we are not investigating how this circumstance came about. The argument is that we are advance in our preparations for doing so, but perhaps the Minister or a member of Cabinet can reply and tell us when the inspectors will visit Anglo Irish Bank, return and put a report before the public on what went on there, which was scandalous by any consideration.

The public are naturally interested in the fact that the top 15 borrowers in Anglo Irish Bank are responsible for €7.5 billion, some €500 million per client. We still do not know the terms of reference given to the Garda Commissioner in regard to the possibility of fraud or inappropriate corporate behaviour. The public is entitled to know this before it accepts the Bill for the new banking system, inform the new banking culture or acquire a huge burden that will go forward to future generations.

The failures in regulation are being considered by those who are largely responsible for them. There is no evidence of independent distance between the examination and the failures in regulation, which were scandalous — the only word that can be used for it. People will be searching through remote footnotes in Central Bank quarterly reports to say that they warned of this or that. It is a ridiculous but sad, pathetic exercise in bureaucracy that seeks to recover credibility where there is none to be found.

In terms of the options before us, which are in the content of the Bill, one might reasonably ask what options were negotiated with the European Central Bank. Let me clear something up. The European Central Bank is simply accepting collateral from the Irish banking system, collateral which consists of Irish Government bonds. It is not involving itself directly with the Government's failure or pathetic response to the toxicity it presided over because of its deadly political intersections.

One might ask a question which is more than academic. What would happen if, instead of taking over such a large bundle of toxicity, the Government decided to address the issue of the mortgage books of the different banks? There is a tradition in this and many other European countries, such as Britain, of people paying their mortgages. It would have provided the Government with a mechanism for achieving liquidity. It would, in addition, have incurred a much lesser risk in terms of asset cover on behalf of the taxpayer and the Government would have been able to direct policy by restructuring the boards of the banks. The Government would, most powerfully — a point I will return to — have been able to head off home repossessions of people in danger of losing their homes.

The Government could have achieved this through temporary nationalisation. It could have cleaned the banking boards. It could have set up an agency to handle transitions from mortgages to leases to rental income and the right of return. In addition, it could have a far greater guarantee for taxpayer into the future in terms of assets generating a real income. That would have created some stress for the bond holders, however. I have not seen any evidence offered in relation to a number of other issues. It is a matter of opinion. In the short term, the public is entitled to know the terms of reference of the Garda investigation, which I have already mentioned.

I would like to speak about the public interest directors, who represent another little cosmetic aspect of this proposal. Every now and again, an opinion floats in from the directors. The public interest directors will not be able to function very much unless the Companies Acts are amended in a manner that enables the Minister to define to the House what precisely he expects them to do by way of public interest. I am reminded of the trammel on worker directors that was provided for under the Companies Acts. In one company after another, worker directors were compromised by the fact that they were bound by the Companies Acts. They were unable to act in the way that many people demanded of them. In the case of the public interest directors, all that has happened so far is that someone who was once a politician became a banker overnight and described the reasonable request for the public to be given information as "prurience". I assure the person in question that the correct rage which is at the basis of the public's demand to get answers to the questions I have highlighted is being guided by more than prurience.

I read the speeches made by the Minister for Finance and the Taoiseach at the beginning of this debate. It seems to me that they seem to be relying for liquidity on a change in banking culture. If I had time to go through the Minister's speech, I would focus on his reference to the agreement that has been reached with Bank of Ireland or AIB for this year or next year. There is nothing in the legislation to enforce liquidity. This Bill will not change the banking culture that brought us to this poisoned place into something that can serve the needs of the real economy in liquidity terms. The Taoiseach coined a new cliché when he started to talk about a banking system that is "fit for purpose". Clichés can last for more than a decade in economics, sadly. We wanted a system that dealt with banking rather than gambling.

It is interesting how language can slip away in a manner that prevents us from engaging in a critique. When I examined AIB's annual report, I read Mr. Dermot Gleeson's statement that "the turbulence experienced in the global economy and financial markets in the second half of 2008 was without precedent in our lifetimes". I remind Mr. Gleeson that the salaries taken by him and the other non-executive directors were without precedent in any decent society. I congratulate the Minister for Finance on becoming the majority shareholder in a bank that, according to Mr. Gleeson, is well capitalised, well diversified and has a strong balance sheet. Mr. Gleeson, who was the Attorney General when I served in the Cabinet, also suggests in the annual report that AIB has millions of customers who do business on a regular basis and deliver repeatable earnings. I assure him that his former Cabinet colleagues would not have been impressed with such speculative commentary. It is like saying one thinks the piebald horse will win.

The public rage has been informed by the notion that we can keep going as if nothing has happened. We are not getting the kind of analysis we want, sadly. I would have no difficulty with going in detail through the various issues that were raised in the Second Stage speeches of the Minister for Finance and the Taoiseach. Many questions have not been answered. It seems that this proposal is based on a number of extraordinarily weak assumptions. Where is the evidence that the property market has bottomed out? I have the height of respect for the Minister, Deputy Brian Lenihan, who is an intelligent man. In his contribution, he quoted from a limited piece of data relating to the Dublin commercial property rental market. It is important to note that the market in question is being sustained by legislation that stops commercial rents from decreasing, even at a time when businesses are going out of business and jobs are being lost in the retail sector. One cannot draw general conclusions for any other sector of the rental property market from such a little sliver of data.

It is interesting that everyone has accepted the myth of the month, which is that NAMA, as proposed, is the only game in town. Those who believe it is the only game are not pressing for answers to the questions I have listed, nor are they testing the assumptions on which this notion is based. It is interesting to compare Dr. Alan Ahearne's suggestion that we may be bottoming out with what he has said in academic publications. In one publication, he described the cycle of property values as being approximately twice as long the cycle he projects when he speaks about the end of the Irish cycle. One cannot analyse historical cycles by saying they conventionally finish within a certain number of years. Dr. Ahearne must have been informed by some special evidence that has led him to change the theoretical position he previously espoused. Perhaps he has been so informed.

In their speeches, the Minister and the Taoiseach referred to the investigations that have been carried out in the main banks — AIB, Bank of Ireland and Anglo Irish Bank. When I refer to the long night in September 2008 for which we are paying such a high price, I am not interested in distorting anybody's position. I appreciate the urgency of the situation at that time, but that cannot explain the conclusion that Anglo Irish Bank had the same systemic value as AIB and Bank of Ireland. I can see how one could make the case that the disposal of the loan books of AIB and Bank of Ireland was linked to the future of the Irish economy. However, the loan patterns that were approved are indefensible. I could ask similar questions about the disposal of various assets — 36% of which are land, 28% of which are buildings and 36% of which are contractual paper — to which the Minister referred in his speech. If I remember correctly, the Minister said at one stage that we were not exposed to any derivatives, in the United States sense of that term, and their toxicity. I am not sure whether he said that last September or last week, but that is academic. I would like confirmation of what precisely is meant by the third category of commercial paper.

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