Mary Wallace (Meath East, Fianna Fail)

I acknowledge and appreciate the fact that the Minister for Finance published this legislation on 30 July, allowing ample time for people across the country to debate the matter. It has been debated at many meetings and by all citizens. It is an issue that everyone has a view on and this is a good thing in itself. NAMA is the most important Bill to arise in the House in decades. When we are long gone from here we will remember this time, this decision and why it is so important. NAMA is designed to provide the banks with a clean bill of health and, as a consequence, provide the flow of credit on a commercial basis to individuals and businesses in the economy.

The banking system is vital. From meetings we have all had with businesses and service providers who are having difficulty securing finance to develop their businesses, we see the importance of the banking system in terms of the loss of jobs from those unable to develop their businesses. It is essential we address the issue of the availability of banking finance in the economy, particularly to small businesses. Governments all over the world have had to step in during the international crisis. Delaying action in these matters is not an option and only puts a greater cost on the taxpayer in the long term. It is very important to act now in order to benefit from the economic recovery as it emerges in the United States and across Europe.

We are all very disappointed at the state of the banks and we are annoyed at the way our regulatory system let us down. There was appalling behaviour by some in the financial system and it is important that confidence is restored through the action now being taken by the Government in this legislation. There is no doubt that the banks should be exceedingly grateful to the taxpayer for support. In return for the support, the Government has every right to expect the banks to play their part in the economic recovery of the State.

An essential element of this is the provision of credit to business to develop, protect and create jobs. The public knows we need the banks and we cannot have an economic recovery unless we fix the banking system. People need to be reassured and the restoration of confidence is and will be key.

The decline in the country's economic fortunes has been dramatic, profound and extremely swift. Throughout the country people have lost jobs and taken pay cuts, with many people genuinely trying to stay afloat. People are suffering and businesses are struggling. It is imperative for our sake and for the sake of our children that we address this situation immediately because without a banking system we do not have an economy. The banking system has let us all down but it is essential for the economy that the banks are revived. However, this revival must go hand in hand with major reforms and restructuring of operations to ensure our people and economy are served in a proper manner by our banking system.

Through a series of measures, the Government has sought to stabilise the banking sector since September 2008, beginning with the State's guarantee of 29 September 2008, the recapitalisation of AIB and Bank of Ireland and the taking of Anglo Irish Bank into State ownership to prevent it from destabilising the rest of the banking system and the economy. There is no doubt the banks should be exceedingly grateful to the Irish taxpayer, and the Government has already taken a number of important steps to ensure changes in the banking system, including the holding of shares in AIB and Bank of Ireland that have gained significantly in value since the taxpayers' investment, a cap on bank executives' pay, the fees that will accrue to the State as a result of the guarantee and the imposing of the new rules on the banks in their dealings with businesses and residential mortgage clients.

The establishment of the national asset management agency is not about bailing out the banks but about saving the economy. All of the measures taken by the Government have sought to stabilise the Irish economy and to protect the Irish taxpayer. As a result of NAMA, the banks will be in a better position to raise funds for lending to small and medium sized businesses as well as to individuals. The banks will have greater access to cash through world markets and the European Central Bank because of the transfer of bonds from the State to the banks in the payments of the loans.

The system which we are debating, the national asset management agency, has the backing of the IMF and the ECB. Both of these international agencies have commented favourably on this approach. In its recent report on Ireland, the IMF recognised that NAMA is a crucial step in resolving the banking crisis and will deal with the uncertainty about the asset quality, in particular those relating to land and property and associated loans on the banks' balance sheets. The IMF and most experts agree that as long as this matter is left unaddressed, the banks will not be able to play their part in the restoration of economic growth. The IMF described NAMA as pivotal to the orderly restructuring of the financial sector and limiting long-term damage to the economy. Financial markets and international commentators have already reacted positively to the NAMA legislation. Last week, the Financial Times stated that nine tenths of the detail of the plan are absolutely right; its only concern is that the proposed bank levy in the event of NAMA making a loss might be too hard on the banks.

With regard to developer account holders whose accounts will move to NAMA, it is important to note the clarity from the Minister that the amount a borrower owes will not change because of a transfer of a loan to NAMA. I also welcome the Minister's announcement that he intends to issue guidelines governing the agency's interaction with borrowers in the completion of properties acquired by NAMA.

There has been much debate on the value of assets that NAMA will hold and discussions about current market price. There is no current market price for land or development products because there is no market. Banks are not making loans for land and development available as these loans are still on the banks' books. This means there are no buyers. NAMA will not fire sale these assets; it is expected they will be disposed of over a five to ten year period. An important matter the Minister identified for us is the estimation that NAMA will have to achieve less than a 10% uplift over current market values on its assets over ten years to break even.

Another important point of clarity from the taxpayer's point of view is that if NAMA makes a profit this money will accrue to the taxpayer. The Labour Party has proposed blanket nationalisation and that alone-----

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