Jan O'Sullivan (Limerick East, Labour)

The former US president, Thomas Jefferson said of banks in 1802:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.

This is an apt description of our current banking situation.

On the Pat Kenny radio show this morning, I heard of people who have woken up homeless and others in the courts defending themselves against the banks while trying to hold on to their homes. Many were losing their homes to the very bankers and banks that we are now bailing out with taxpayers' money. There is no danger these bankers will lose their banks or any property of great substance to themselves such as their homes.

I know a young couple with two small children who own a house in a Dublin suburb. Recently, the husband lost his job while his wife was a stay-at-home mother. They had to hand back their home to the bank, walk away from it and return to her parents' house to live. They have been told by the banks never to come looking for a loan again because they have been blacklisted. This is what is happening to the ordinary people of Ireland.

I know a person who had a small financial business which was closed down by the Financial Regulator ten years ago for a relatively small infringement. That is the same regulator who sat back while Anglo Irish Bank built up its losses over a small number of years to the point that of the €77 billion NAMA lump sum, €28 billion relates to the bank. Anglo Irish is now a zombie bank which lends to no one while its customers were a small number of wealthy property developers. Yet, the nation must now bail it out while shamefully, this House voted to underwrite and guarantee it.

The leader of the Green Party, Deputy Gormley, who is present in the Chamber, steered a vote in favour of NAMA through his party last weekend. How does he feel that loans of €28 billion were allowed to build up in this bank which the taxpayer must now underwrite? Whatever about gambling, which is what it was for these property developers and speculators, NAMA is gambling with taxpayers' money and an unknown future. We are being asked to take on board a hope value. Fintan O'Toole wrote in an article during the early stages of the debate on the agency that it will lead to the NAMA-isation of our finances being built into the future economy. We will, he pointed out, be dependent on the properties taken on having a value in ten years time which will equate with the amount of money the taxpayer is now putting into the scheme.

The people being asked to bail out the banks include the primary income earners in their families who lost their jobs and face an uncertain future with household bills to pay including large mortgages. They include the owners of small indigenous companies that cannot gain access to credit from our banks to continue trading. They are the taxpayers who are burdened with pension and income levies on top of the uncertainty of additional cuts and the possible introduction of water and property charges. They are the people trying to manage on social welfare who never got caught up in the property bubble or benefited to any great extent from the Celtic tiger. All are trying to live their lives when all sorts of obstacles and challenges confront them while the once-hailed builders, developers and bankers, portrayed as the elite among us and who profited immensely on the back of ordinary workers and taxpayers, see NAMA as the lifeboat coming to rescue them.

My question as to where all the borrowed money has gone remains unanswered. Many of the developers borrowed money to build large developments, units in which they charged between €400,000 and €600,000. The moneys handed over by the ordinary people who bought these houses must be somewhere. The young couple I referred to earlier were told by the bank they would have to find the money to pay back their loan. Is there any real effort being made to go after the moneys the developers borrowed?

Last week, Professor Joseph Stiglitz, Nobel laureate in economics and a former chief economist in the World Bank, after a lecture at Trinity College Dublin told an interviewer:

[NAMA] is the kind of highway robbery which we see happening all over the world, with guns pointing at the heads of the political leaders and the bankers claiming the sky will fall down and the economy will be devastated unless they get this money.

He went on to say that the valuation system should take into account the compounded value, what would be compound interest if it were a loan for a house, and that we should seek much more for the long-term value of the properties included in NAMA.

What disturbs me most is that there does not appear to be any attempt to change the culture of banking for the future. I cannot see any instrument in the Bill that will make bankers change the way they do business with small companies that are trying to borrow money and are being refused, despite all the money the taxpayer is putting into the banks. The banks should, for example, be forced to give favourable charges and interest rates to businesses over the next few years. I refer to ordinary, small, indigenous industries. There is also a service called factoring and invoice discounting for which banks charge. A person who runs a small business made the practical proposal to me that the banks be forced to provide this service free of charge. Specific measures should be taken to ensure the bankers give favourable terms to these small businesses in their time of difficulty. I cannot understand why that cannot be done because it is taxpayers' money that the Government is putting into these banks. Why can they not be given the money with basic conditions? If the Minister for the Environment, Heritage and Local Government were giving a grant tomorrow to an organisation, his Department would be able to lay down the terms and conditions under which, and to say exactly how, it should spend the money.

Nothing seems to have been learnt from the failure of unbridled capitalism around the world and the failure of banks and developers to use money in any way that makes sense such that they have lost all this money at the taxpayers' expense. There does not seem to be any mechanism by which, or any intention of doing anything, to change this culture which failed so miserably.

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