Brian Lenihan Jnr (Dublin West, Fianna Fail)

I will not be drawn on this subject. Apart from maintaining a particular commercial entity, it is essential for the stability of our financial system.

The position in respect of bank rescue operations is that there is a specific prohibition, under EUROSTAT, on treating such a vehicle as other than borrowing for Stability and Growth Pact purposes. Rather than repeal this provision in light of the current banking crisis - I understand some member states made demands in this regard - it has been decided to devise methods to ensure that avoidance can be achieved in a different way. Essentially, that is what has happened in Europe in respect of this matter. I understand the frustration of some Deputies with regard to the apparently peculiar character of the transactions which that generates. However, that is where Ireland, as a country, stands.

The implications of being in the Stability and Growth Pact for the purposes of this investment are quite serious. They do not just relate to the actual picture as regards the national debt, they also relate to the fact that as payments are made in a different direction, they count as being in and out of the national balance sheet. That would make the computation of the national accounts exceptionally complex.

In any event, I cannot accept the amendment because it could result in EUROSTAT changing its preliminary decision on the treatment of NAMA's operations and the national accounts. I have repeatedly explained that we should welcome EUROSTAT's preliminary decision - which most Deputies have done - because, as a result of it, the acquisition of assets from the financial institutions will have no effect on either the general Government debt ratio or the general Government balance. That places the asset protection scheme on an equivalent footing with bank support schemes in other member states, which are also being recorded off balance sheet. The main advantage of this is that it minimises the danger of the markets or international investors misinterpreting our headline debt or budget balance ratios when comparing Ireland against other EU states.

I accept that this statistical treatment does not change the basic fact, which Opposition Deputies naturally highlighted, that the operations of NAMA will lead to an increase in the amount of the State's potential liabilities. However, it should not be overlooked that these liabilities will be matched by countervailing asset holdings.

It is intended that the master special purpose vehicle will be established by the board of NAMA to conduct the purchase, management and disposal of loan assets which have been identified and valued by NAMA. The legislation provides a robust process for the appointment of members of the board of NAMA, requiring that they should possess senior level experience and expertise in relevant areas. These are complex commercial tasks and there is a danger in imposing statutory regulations and restrictive rules in respect of them.

A detailed legal shareholder agreement is being drawn up and will be put in place to ensure that, at all times, the NAMA board will have a veto over all the master SPV's actions and decisions. This will protect the NAMA board, which will have significant responsibilities, and it is also in the interests of all citizens and taxpayers. I intend to issue a direction to the board of NAMA to the effect that not a single decision that would not be in the best interests or in line with achieving the objectives and purposes of the NAMA legislation should be made or should be allowed to be pursued by the master SPV. I undertook on Committee Stage to have the NAMA SPV and group entities issues addressed in more detail in the legislation and to refer the matter to the Attorney General. The issues have been examined. I propose to introduce a number of amendments explicitly applying provisions of the Bill to the NAMA group entities. While these amendments can be dealt with later in the debate, I will outline them now.

First, the Prevention of Corruption Act 2001 provisions that apply to the NAMA board and staff will be extended to all directors on the boards of NAMA group entities. Second, the duties relating to NAMA board members will also extend to the boards of the NAMA group entities. In addition, I am bringing forward an amendment to require NAMA and all NAMA group entities to have a register of interests for board members and senior staff. I acknowledge it was Deputy Mulcahy who suggested this and Deputy Burton who suggested the earlier ones. Third, the detailed reporting requirements in Part 3 of the Bill will also apply to the activities of NAMA group entities and the powers and rights that NAMA has in its dealings with participating institutions will attach to NAMA group entities.

There has been an amount of revision of the Bill in respect of this subject. The Attorney General is satisfied that the core power exists. There has been a detailed section by section analysis of this matter which I believe addresses many of the concerns raised by the Opposition. I cannot go the final distance that Deputies Bruton, Burton and Rabbitte want me to go because I must keep within the boundaries of the EUROSTAT advice. Clearly, that is an important issue. Again, the Dáil committee can evaluate and scrutinise what is put in place, including the shareholder agreement.

The heads of the shareholder agreement can be submitted to the committee. However, I cannot give an undertaking on every provision of the shareholder agreement for obvious reasons.

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