Brian Lenihan Jnr (Dublin West, Fianna Fail)

I am not in disagreement on that. We are now on AA-minus - on stable, mind you. The patient has finally stabilised in intensive care, but that is where we are in terms of the rating agencies.

I want to return to the topic because it is an important one. The programme for Government contains clear commitments on it. The Labour Party had a motion yesterday evening debated and decided on in that regard. It is an issue on which we will engage with the banks to see how one can have part-equity arrangements, how one can have interest-only payments and how different mechanisms can be devised to ensure that such basic security remains.

I cannot accept the form of Deputy Burton's amendment. She presented it as enabling me to give a framework. The guideline section, which has been drafted by my officials and which I am submitting here this afternoon, is wide enough to cover this issue as well. The position is that we cannot suggest there will be a two-year moratorium.

I have dealt with most of Deputy Burton's points. Deputy Barrett wanted the word "may" replaced by "shall". The word "may" empowers a Minister to do far more than "shall", which simply imposes an obligation on a Minister. When an obligation is imposed, the terms of the power can often be invoked far more easily in a judicial review proceeding against a Minister. From time to time, I was attracted by it, but I have consulted with the Attorney General over lunch and he assures me and is very insistent that that phrase could raise an issue in regard to other powers in the Bill which are not predicated on an assumption that the Minister will exercise them from time to time. The reality is that once the word "may" is used, the Minister can exercise the power at any time.

Deputy Barrett also suggested these guidelines should be submitted to the Oireachtas. In so far as they are guidelines, I agree that there should be disclosure of them to the Oireachtas and we will make an appropriate provision for that by way of Seanad amendment.

Deputy Ciarán Lynch dealt with the issue of the roof over people's heads and residential mortgage debt. I want to repeat to Deputy Costello that the financial institutions were not consulted about this section. These are guidelines but they are backed up by an appeal mechanism. Deputy Crawford also expressed concern about the credit squeeze.

Deputy Fahey was concerned about the powers of the regulator, which are very extensive under the legislation. Of course, the power of the regulator is to regulate. This power is being conferred upon the Minister because it is a power connected with the whole economic and social development of the State and it is a power directed with the arrangement that is being entered into by the agency, but it is a power that must rest with the Minister. With regard to lending patterns, monitoring regions and external as against home customers, which were issues raised by Deputy Fahey, I will ask my officials to take them up with Mazars for its next report.

Deputy Terence Flanagan also raised questions concerning homeowners and referred to the code of practice on mortgage arrears. This does apply to the sub-prime lenders as I extended it to such lenders earlier this year, so it binds all lenders. The regulator's code of practice is a good one and it applies to these lenders.

Deputy Ulick Burke referred to the question of facilities. It is important for Deputy Burke to note that the appeal mechanism provided for in my amendment will allow such an issue to be considered outside that formal banking structure. It is an important issue and I agree with the Deputy that we need to be in a position to do that.

Deputy Michael D. Higgins again returned to the question of "may", which I have dealt with already. The Deputy also made a number of points, with which I agree, although I am not quite sure I can add much at this stage to the points he raised because I have summarised my own proposal.

Deputy Richard Bruton was anxious about the whole issue of homeowners, as was Deputy Higgins. In a sense, this is a separate issue. Many Deputies have argued that homeowners should be brought within the scope of NAMA. It is entirely understandable that citizens will say to one on the street: "Why can't I have a NAMA?" In fact, in canvassing on the Lisbon referendum in Deputy Terence Flanagan's constituency, a citizen working in one of the shopping centres approached me and asked: "Can I have a NAMA as well, Minister?" He meant it in all sincerity and good faith, and we had a very amiable conversation about it. His point was that somehow the builders were being bailed out and that homeowners should be bailed out as well.

NAMA is not, as I must repeat, a bailout for builders. Were one to transfer a mortgage into NAMA, and were NAMA to buy the mortgage books of the banks, to be commercial NAMA would have to enforce the loans and repossess the properties, and the borrower would be fully liable for whatever sum was owed. That is what would happen if the NAMA model was applied in this context. It is because we are dealing with commercial loans that the full rigour of a NAMA loan can be applied. We all know our approach to, say, developers, and we know the parlous position of some homeowners, though not as many as is being suggested. However, many of those in negative equity are paying their loans, although clearly there has been an increase and there will be a further increase in the degree of default. That will require a structured approach and I do not rule out any measures. However, any measures have to be consistent with maintaining the solvency of the banking system itself.

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