Noel Treacy (Galway East, Fianna Fail)

Is cúis áthais dom seans a bheith agam cur leis an díospóireacht seo ar an mBille seo. I am very pleased to have the opportunity to participate in this very important Bill. Any student of history can look back at the political evolution of this nation, or, prior to that, at previous administrations, albeit of a foreign dimension, and see that in every generation, in every century, almost in every decade, there have been bank failures in this country. Between 1770 and 1800 there were serious bank collapses on this island.

In 1780, a major application was made to the British House of Commons and the Irish House of Parliament, Grattan's Parliament, to create a new bank. It is ironic that history has repeated itself. The people who opposed the idea were some of the merchant princes of our great capital city and a few others who believed there was a threat to their dominant positions in the national and international marketplaces. At a time when the current financial crisis bedevils our island and there is a need for credit fluidity, it is ironic that Fine Gael on the right, Labour on the left and Sinn Féin on the far left oppose this important Bill.

In 1782, three attempts were made to create the Bank of Ireland. In May of that year, the law was passed and an opportunity for our nation was created. While there was serious opposition to the Bank of Ireland, its important role in our success has been proven. On the establishment of the State by Cumann na nGaedhael in 1922, the first group to which it turned for support was the Bank of Ireland. That support was made available and has helped to create our modern nation. In 1983, Fine Gael turned to the Bank of Ireland and called in favours. It is ironic and unfortunate that the Labour Party, which has had a direct relationship with the management of AIB over the years, is opposing the Bill.

Between 1989 and 1992, I had the privilege of being a Minister of State with responsibility for commerce. With the Minister for Finance, I had responsibility for banking regulation. I am not boasting, but I may be the only Member, past or present, who placed an inspector in a bank as a result of information that became available to me as Minister of State. I took that information to the Minister for Finance and the Taoiseach and we were able to deal with a serious situation. Afterwards, I was given information pertaining to problems that arose in a particular insurance company during non-Fianna Fáil Administrations. I put a team of inspectors into the company and dealt with the situation.

Greater economic and Opposition minds than mine called for a major change in banking regulation. As a result, the Irish Financial Services Regulatory Authority, IFSRA, was established and responsibility for the focused management and inspection of financial structures transferred to it from the Parliament and the Government. The problems that we have inherited came about because those who were highly paid to do their duty did not keep an eye on the transfer of capital from one institution to another. The liberalisation of credit facilities has created a serious problem.

One must be mindful of the changes in Ireland. In 1987, some 700,000 people were employed and the national debt equated to 131% of GDP. By 2007, some 2.2 million people were employed and the national debt had decreased to 25% of GDP. What occurred in those 20 years? There was a major demand for services, infrastructure and housing, all of which posed everyone a major challenge. Economics and opportunity took over and labour, product, service and investment costs grew astronomically. Despite the success of our economy in recent years, the international crisis originating in the US with the collapse of Lehman Brothers and other institutions and problems in Europe, such as Iceland's economic collapse, created an international wobble in the financial markets. This broke down the trust that was critical to the movement of capital, the opportunity for credit and the capacity for a structured system for the consumers of the EU. Our nation has had its difficulties, but where would we be if the vision of Fianna Fáil in taking us into Europe and the eurozone had not given us the support critical to carrying us through this crisis?

The proposals before the House will have a major impact, in that they will ensure that we can move the banks' debts to NAMA, borrow the necessary funds, restore credit flows and bring a new confidence to the economy. Through NAMA, we will manage our way in a larger economy with greater capacity and consumer demand and an ever growing export market. During the next three to five years, this will allow us to return to a position of economic growth.

This is not the first time that we have been faced with such a situation. In 1985, when I was a member of the shadow cabinet, there was a serious crisis with the Insurance Corporation of Ireland, which was owned by AIB. On 2 April, the then Taoiseach, Dr. Garret FitzGerald, and the then Minister for Finance, Mr. Alan Dukes, briefed us in the morning about a crisis facing the banking sector and AIB in particular, namely, the impending collapse of the insurance corporation industry. The report was taken to our shadow cabinet by our then leader and later Taoiseach, the late Charles J. Haughey, go ndéanfaidh Dia trócaire ar a anam uasal dílis. We debated it for approximately 90 minutes and took a decision that, in the interests of Ireland and its financial system, we would support the Bill that would be before the House later that day to save the banking and credit systems.

By 8.30 p.m., the Bill was before the Seanad, which sat late to pass it. Before the banks opened the following morning, the President had signed the Bill into law. This solidarity was a gesture of pragmatic patriotism, commitment to the nation and honour and integrity as Members of Parliament. It showed that our collective wisdom was best and that we should work in unison to sustain a financial system for our people, a system that was critical to the evolution, trade and commerce of everyone.

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