Paul Gogarty (Dublin Mid West, Green Party)

Deputy Burton would know much more than I would about being tough, but to be tough we must have the legislation and the regulations in place. Part of the problem we had over the years was that even though we had a lax regulator, we also had very lax regulations. The only way to enforce this is either to nationalise the institutions in question, or to become the de facto owner. The Minister will time the announcement in accordance with market sensitivities, but even the taxi drivers know the story and they would say that the State is going to have a majority shareholding by the State. In that case, there will exist what Deputy Burton called "the second chance", because we will be the de facto master of these banks and will have much more input.

I agree with Deputy Burton in one respect. The perception is out there that we are not being tough enough with the banks. I have no doubt that behind closed doors, the Minister has scared the living daylights out of some of the individuals in question, and there will be completely different management at the top over the next two years.

I welcome the fact that the Minister has had some discussion on guidelines for supporting homeowners. I am glad in this instance that he has not decided to enshrine any measures for homeowners in the Bill, because it is totally inappropriate. It is not about that. The terms of reference for the Bill do not specifically mention that. They mention the availability of credit in the economy, protecting taxpayers, and resolving the problems created by the financial crisis. One could argue that the banks are liable to get a little bit tougher with homeowners than before and the small people will be hammered. However, the facts on the ground on repossessions do not indicate that so far, but there is always a risk.

The other remit deals with restoring confidence in the banking sector and contributing to the social and economic development of the State. One thing will lead to the other. If the banks are recapitalised and are able to operate more efficiently without having debt hanging over them in the future, it is in their interests to lend as much as possible as interest rates rise again, and to ensure that people are making whatever repayments they can. The programme for Government has a few commitments in this respect. One of them is about banking reform, and states that the Government and the Financial Regulator will develop new rules on the governance of major financial institutions and a new code of conduct for the treatment of non-performing loans for small and medium businesses, and that a percentage of lending will be guaranteed to SMEs. There is also a firm commitment to introduce new measures to protect families having difficulties with their home mortgage payments. That is something the Green Party would have pushed for in negotiations, and I am glad it is in there. There is also a commitment to reform debt enforcement in light of the recommendations of the Law Reform Commission, and the related issue of debt collection agencies.

It is clear it is not in the interests of the banking sector to go heavy on the those people who are suffering due to the State's obligations to recapitalise the banks. However, I do not believe this can be let go too far. Given that the Minister responsible for NAMA is also the Minister responsible for the instruments that will ensure mortgage holders are protected, I would be grateful if he could indicate a timeframe on whether any legislation separate to the creation of NAMA will be introduced to protect mortgage holders. Will it be done before next February? We need to have related legislation alongside NAMA implemented as quickly as possible.

No matter what version of NAMA has been touted by Fine Gael or the Labour Party or anyone else, an asset management agency will always be risky. This legislation has inherent risks for the State. Those who are suffering because of negative equity, for example, do not have one iota of belief in what is going on in this House. They need to be reassured. A suggestion has been made that would assist home owners who are in negative equity and in serious danger of falling behind with their payments. It has been suggested that rather than being the sole possessor of that equity, the banks could become shareholders in that equity. People could be allowed to pay their mortgages at normal rates and repay the banks at the end of that process. I am sure such a proposal will be brought before the Oireachtas quickly. The Minister should reassure the House that the Department of Finance is working on such a plan, in parallel to the finalisation of the NAMA process.

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