Joan Burton (Dublin West, Labour)

On behalf of the Labour Party I want to be associated with Deputy Kenny's remarks on wishing well the Minister for Finance.

I am not surprised at the terms of reference of the three-part bank inquiries that we are to have. It follows in the great tradition of Deputy Bertie Ahern and Charlie McCreevy in that it attempts to pull the wool over the eyes of most ordinary taxpayers who have a raw hunger and desire for some explanation for the suffering they are going through, whether that is losing their jobs or pension savings or the collapse of their small business.

I was talking to somebody the other day who runs a small engineering firm and who employs 80 people. The firm is letting 40 people go now because it cannot get any access to finance.

The banking inquiry announced today by Fianna Fáil is a clever sidelining of the issue until the far shores of the aftermath of the next general election are reached. I think less of Fianna Fáil for that. As for the Green Party, much of Senator Boyle's talk in the different television and radio studios was hot air. It would be very difficult for ordinary members of the Green Party to identify any of this as an open and transparent inquiry. However, as far as the ordinary person on the street is concerned, this is a Government that could not get salt or grit, that has left large parts of the west of Ireland under water, and which has left many parts of the country without water for at least the past two weeks. Why should we expect that such a Government would leap with alacrity to find out what actually went wrong with our banking system? Why should we expect it to find out how to avoid that happening again and how to restore our international reputation for probity in finance? At the moment, our extra borrowing costs are running to about €1 billion a year due to the premium we are paying over German bond market rates, as a result of the failures of the Irish Government and the collapse of the Irish regulatory and banking systems. Why should this Government be particularly concerned? What is €1 billion between friends? Last year, the €7 billion that was pumped into Anglo Irish Bank and the two main banks was almost double what was asked for in cuts from social welfare recipients in the budget delivered before Christmas.

I disagree with the references to de Larosiere and Lord Turner in the UK. Our banking failure had one unique feature that was not related to the derivatives and complex financial instruments that were underneath the global financial collapse. We had a banking system with two banking institutions that were effectively rogue institutions, but because they were allied with the most powerful political protectors, they became a model for our two long-standing banks, whose greedy and incompetent managements those banks decided to copy. Anglo Irish Bank was a small niche bank which supplied developers who then funded Fianna Fáil. In that circle of self regard and in that toxic triangle lay the ruin of our system. A small minnow, Irish Nationwide Building Society, was able to do the same thing on a micro-scale, so we only have to pick up €8 billion of its toxic debt and pump in €1 billion-€2 billion into that building society to merge it with another mutual institution.

Our banking crisis is home grown. As it has a unique and important political element, it is wrong for this Government to endorse the approach it is taking. Politicians, whether they are liked or not, are elected by the people to comment on what went wrong. While there are administrative lapses, regulatory collapses, and actions by the boards of management and directors of banks that are utterly reprehensible and properly the subject of inquiries and potential criminal investigations, there is a political dynamic at the core of our banking failure. The Government's motion tries to divorce the political causes of the failures that are inextricably linked to the general business and financial ruin that faces this country. It has done itself a grave disservice, because it is only when we are able to say, post-Peter Bacon and the ruling Fianna Fáil Party, endorsed by a compliant Green Party, that we no longer support crony capitalism, that we will recover our ratings in the international bond markets.

The Government has made a catastrophic error of judgment on Ireland's future with what it decided to lay before this House as terms of reference. I sympathise with the Taoiseach, who feels he was landed in this alphabet soup by his two predecessors, Charlie McCreevy and Bertie Ahern, because he inherited the tax breaks and so on and there was not much he could do in four years at the Department of Finance. That is possibly a defence that the Taoiseach can credibly put forward. It is not a defence that ordinary people accept, but I understand that it is a narrative that might apply to his understanding of how he got here. However, he is wrong to deny this country a proper and open bank inquiry.

Most democracies have inquiries. If a plane crashed tomorrow in Shannon Airport or Dublin Airport, a commission of inquiry would be automatically established to find out what went wrong. If there was a major natural disaster here, there would automatically be an inquiry. The banking collapse is the biggest financial disaster that has hit this country since the Second World War or since the economic war and the civil war, yet we are to be denied an open and accountable inquiry in the Oireachtas. There are open inquiries in democracies. Dictatorships refuse to have open inquiries and go for closed inquiries and trite explanations. The Government is not serving this country well with what it proposes.

A financial crisis inquiry commission was set up in the United States last week. The appointees to the commission are former office holders who are independent and bipartisan. The Democratic Party commissioner, Mr. Angelides, said that "we start with the belief that the financial crisis is not a past tense phenomenon." It is not a past tense phenomenon. The notion that the Government would stop the remit of this inquiry up to September 2008 is an outrage. The phone calls in the autumn of 2008 which went between the Financial Regulator and people in Anglo Irish Bank were widely reported in the media. Mr. Willie McAteer, the finance director at that bank, told the then head of the Financial Regulator, Mr. Patrick Neary, that the bank would be "managing its balance sheet", to which Mr. Neary is famously recorded as replying, "Fair play to you Willie". This is a "fair play" bank inquiry, in which anybody who has a fondness for cuteness in Irish culture will be able to say: "Fair play to Brian and Brian. They fixed it." As a consequence of the Taoiseach and Minister for Finance doing this for them - foolish as they are - the bankers will repeat much of the bad behaviour that systematically led us into this mess. They may not yet be up for bonuses and may stay their hand a little but as soon as they are out of the traps and telling their little scéalta in private with no one to ask the hard question or be awkward towards them, they will be back with the billion dollar bonuses they awarded themselves. The shareholders of the banks of Ireland will not thank the Government because they are not taking the patient into recovery but leaving us with a banking system which will limp on and perhaps have another disaster before the year is out.

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