Jim O'Keeffe (Cork South West, Fine Gael)

The issue of morality and banks has been discussed for centuries. By coincidence, the book I am reading at present is The Merchant of Prato, which deals with the formation of banks in Venice, Genoa and other places and the moral issues involved such as usury. St. Thomas Aquinas held with the just demand approach.

However, that is history. Today, we are dealing with the practicality of the banks. The first question is whether we need banks. Unfortunately, as many would say, we do. That leads us to the question of what they should do. We certainly do not need banks that operate like snowploughs in the Sahara; we need banks that have a useful purpose. If they were private institutions operating alone, they would be entitled to carry on in their own merry old way, but they are not. They are operating on the basis of receiving taxpayer-backed funds to the tune of €50 billion. On that basis, we are clearly entitled to prescribe the issues that are important to us on behalf of the people of this country. This money is not there to allow them to carry on in the same merry old way. This is not fat cat money to allow them to pay bigger bonuses for playing the markets and speculating, as happened in the past.

I referred to banks operating like snowploughs in the Sahara. It is clear that is what they were doing. They went through a phase in which they speculated and lashed out money when they should have been sensible and prudential. Now, they are going through a phase of refusing money to small businesses and others or effectively doing that by renegotiating loans and applying more onerous terms. We cannot and need not tolerate that. What should we do? We are entitled to prescribe clear specific guidelines. For that reason I strongly support these amendments. We are entitled to say, as representatives of the people of this country, that what we are interested in is a restoration of economic growth, the protection of jobs and new jobs and enterprise being encouraged. We are entitled to prescribe for that.

I have seen advertisements in the newspapers recently about the new business loans that are available. I query those advertisements. My experience is that people with small businesses have been called into their banks and had their credit lines cut off or they have been offered new, more onerous terms. There is less credit and more onerous terms for it. Is that a new business loan? In my opinion, it does not qualify. It is a withdrawal of existing facilities. This highlights the point we discussed yesterday, the need for oversight and scrutiny of what the banks are doing. I do not accept any of their claims any more. For too long we accepted what they were doing. We accepted the assurances from them, like others, that the fundamentals were sound. They were not. The banks are not now in a position to get away with that.

With regard to the amendments, while the Minister has gone some way in amendment No. 127, that amendment must be strengthened. It is too loose and not sufficiently prescriptive. I strongly urge the Minister to take on board the points being made in this debate and to consider strengthening his formula relating to guidelines. As Deputy Burton expressed so eloquently, let the message go from this House that there will be a change in the way the banks operate and a change in attitude and culture. There is no damned way we will put up with the same old game they have played for years, which has landed us in this mess and exposed the taxpayer to such an enormous sum of money. The Minister should take on board the principle of the points being raised and be prepared to revise and strengthen his amendment in this regard.

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