Richard Bruton (Dublin North Central, Fine Gael)

I welcome the Minister's amendment and the tenor of all the amendments being discussed. Initially the Minister resisted them but did come around to the view that the legislation would be enhanced if it had solid guidelines.

It is important as to how the Minister will handle the reporting arrangements in respect of these commitments. After recapitalisation occurred there was a great deal of spin rather than actual hard evidence from the financial institutions as to the extent to which they made commitments to the SME sector. One would expect the Central Bank to provide good evidence of what is happening in SME lending but it does not provide reliable statistics that we can judge independently. The Mazars report was superficial in its dealing with the real situation on the ground.

An important element is not just the guidelines but the reporting arrangements introduced in respect of them. Fine Gael's proposed Oireachtas scrutiny committee, if accepted, would have received the reports from the financial institutions as to their commitments. The Minister is taking a greater step beyond where he was with recapitalisation. He now has a legitimate expectation that the banks will show cause. The Minister needs to not only publish his guidelines for us to have sight of them - ideally before this Bill is completed - but to spell out the reporting arrangements. We should not only be exposed to PR spin. Deputies have told the Minister endless stories of cases that appear to be genuine. There can be instances where people, who may be unbankable, as it were, will put forward a strong case for funding for a proposal that does not have a strong case. If we are not to have endless disputes and people caught in the middle and exposed, we need something authoritative.

We discussed the homeowner's code, which was introduced after the first guarantee was given, but we have gone an awful long way further since then. The only change was an extension from six to 12 months in respect of the recapitalised institutions. That is not sufficient when we are dealing with a crisis, which the ESRI indicates could involve 35,000 repossessions. The Minister has the authority of the Dáil to demand of the institutions, and to insert in his guidelines, something that is more credible and more fully addresses the problem in respect of homes under threat of repossession and the conduct of institutions in that regard. Admittedly, people must make genuine efforts, but if they do that, we expect, as Deputy Morgan's amendment suggests, that the financial institutions must give something in return. The Minister needs to firm up on that.

The cost of funding the banks will decrease considerably as a result of the flow of €54 billion to them. They will have funds of €54 billion at an interest rate of 1.5%. Their average cost of funds now is 3% or 3.5%. There should be scope and an expectation that there would be reduced mark-ups, that the cost of funds would be reduced and that there would be fewer instances of the terrible renegotiation fees applying to people with mortgages. If the Minister is facilitating the banks with a lower cost of funds, there is an expectation that such reductions would be passed on to the customers as well.

I will not go through our amendment in detail as it speaks for itself. One area the Minister needs to examine is the purposes for which these funds will be used other than for extending credit. The potential exists for funds to be used to acquire other businesses, to do things that are all about strengthening the shareholder position and not about providing greater credit in the economy. Banks are already involved in overseas initiatives which they are currently funding. While no one is saying that banks cannot consider profitable enterprises elsewhere, we must ensure that this is not done to the disadvantage of home credit availability.

I welcome the Minister's move in this respect, but I would like to see it amplified. I would like to see detail of it and the reporting arrangements set out.

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