Pat Rabbitte (Dublin South West, Labour)

The more familiar I become with this Bill, and leaving aside its purpose, the scepticism that surrounds it and whether it will deliver on its objectives, the more I recognise that it is an extraordinary work of legislative architectural craftsmanship. It is amazing legislation. However, all of that will be for nothing if we do not address the issue to which Deputy O'Donnell has referred. If it does not get credit flowing again in the real economy, the whole purpose of this financial engineering and all the days and hours we spent on it will be for nothing. It may well be an innovative model of legislative craftsmanship but unless it is seen to work, it is of very little value.

There are all kinds of models for taking toxic assets out of the financial institutions but that is not the issue. From what I heard, nobody in this House opposed any methodology that would strip out the bad loans. This is not the issue. The issue is whether we have a functioning banking system at the end of this exercise. Have we fixed the banks as a prerequisite to trying to get economic growth back into the economy? In so far as this amendment proposed by the Minister goes, I welcome it and that Members of the Oireachtas will see these guidelines. However, I draw the Minister's attention to the fact that in the debate in the other House my colleagues, Senators Alex White and Ivana Bacik, raised the issue of what is now section 210 where it states that the Minister "may make guidelines". They argued that this should state that the Minister "shall make guidelines". Furthermore, the Minister said he was well disposed towards that in principle. He told the other House that he would consider tabling an amendment to achieve that purpose, but this is not what we have. I hope that what we have will work out in practice. It states that the Minister "may make guidelines". The view of this House is that we should admit that the Minister will have to make guidelines because the experience is that credit is frozen. Business is being strapped in some cases and sound business proposals are not being funded and so on.

Rarely has one seen a gulf so wide as between what small and medium-size enterprises are saying to us and what the banks are saying. The banks are saying: "No, we are lending. Look at our advertisements, look at our loan records." They say the economy has contracted and therefore there is less economic activity and less demand for loans. Demand is suppressed and it is not that they are lending less. They say they are still lending but because of the contraction in the economy, it is less and it is not their fault. On the other hand, small companies, small and medium-size enterprises, are coming to Members on all sides of this House and saying they are being greatly constrained in what they can do by the fact that lending to them, whether in terms of overdraft facilities or normal loan facilities, is being restricted by the banks. This significant gulf exists.

I accept the Minister's argument on Committee Stage that it can be very difficult to stipulate how the Minister intervenes in this logjam. Nobody is asking the financial institutions covered by this legislation to loan recklessly to imprudent propositions. Nobody is making that argument. It is the fact that sound proposals are being rejected or being curtailed that is the cause of concern. I accept that it is difficult to tailor guidelines to allow the Minister to intervene beneficially. I do not know how it is broken down either by sector, by establishing targets, by saying there will be so much finance available for start-up companies, small innovation companies or a particular category. However, I do know that this House is not satisfied, unless the Minister for Finance of the day has that authority.

The Minister has gone some way with us but looking at the wider economic situation, one can only be struck by the absence of cohesion outside of this House. A great deal of this is due to the anger that people feel about what has happened. Colm McCarthy said that anger is not a policy and I accept that. However, anger to which we are not seen to respond to reasonably can obstruct a policy. There is serious anger outside this House. The plea one hears from the people who are outside protesting and marching is: "I did not do anything to bring this down on all of our heads." They are unable to understand why it is that the law enforcement agencies of the State do not seem to be able to respond to the situation. In the home of capitalism, the United States, they were swiftly able to show that they were at least on the job but nobody's collar has been felt in this economy and that is aggravating the divisions outside this House. The people have seen blatant wrongdoing and they have not seen anybody held to account.

In a past life I had the privilege of working with the man who is now the Director of Corporate Enforcement and I have a very high regard for him. However, it seems to take forever and a day for him to bring home conclusions. This is aggravating the mood outside the House. The Government is likely to come back in here within four weeks to ask those same people outside to accept further sacrifices, yet it is seen that the people who have plunged us into this crisis are neither being made amenable nor held accountable.

Deputy O'Donnell is right; we are here because of reckless lending and blind-eye regulation. It defies the experts and the commentators to say how it is that none of the watchdogs intervened. It presumably will take more than a decade for us to find out if there is a paper trail and if there were warnings issued by the people who should have been giving the warnings. As a result we are now in the circumstances in which we find ourselves.

We want to ensure the Minister has this power and that the guidelines in question are laid before the House. The Seanad debate had a slightly different tenor than is put on it in this House. I ask the Minister when replying to deal with the arguments advanced in the other House about the proposition that the Government might take on board the suggestion from my colleague, Senator Bacik, about a credit mediator. This was the idea that she advanced based on the French model where this credit mediator model has been established in France as a sort of ombudsman when dispute arises about lending policy where the financial institutions are saying one thing and business is saying another thing. I am advised that this model or credit mediator has worked very well in France. In the Seanad the Minister stated he was minded to consider it. I have no knowledge of whether the Minister intended to do so or whether it was simply an expression of the benign amicability with which he approaches the world and the rest of us when he seeks to embrace us and tell us he is minded to take our proposals on board.

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