Kieran O'Donnell (Limerick East, Fine Gael)

I thank the Labour Party for tabling the motion. As a party, Fine Gael feels very strongly that there is a need for a public inquiry to be carried out by the Oireachtas. We were elected by the people to represent them. To restore confidence to the banking system and to bring credibility to this inquiry, it must be held in public and under the direction of an Oireachtas committee. This is critical because it will be open, transparent and show proper accountability.

The Government has brought forward a counter motion to the Labour Party motion. I listened with interest to the Ministers of State, Deputies Power and Mansergh, who spoke about how this would work. The Government is spinning that this is a public inquiry, but is like a wedding without the bride because it is completely outside the terms of reference of the Labour Party motion. The Government motion refers to bringing forward two reports from the Governor of the Central Bank. It is inappropriate to have a newly appointed Governor - an excellent man of great calibre - carrying out an investigation into an organisation that he has just taken over. The motion only deals with the Financial Regulator and the running of the Central Bank, and there is no reference to Government policy.

The Government motion also refers to carrying out an independent review, but once again it only looks at Ireland's banking set up until September 2008. The Government has not clarified whether this means up to 31 August, in which case its guarantee scheme from 29 September 2008 is omitted, as is the appearance at the Joint Committee on Economic and Regulatory Affairs on 14 October of Mr. Patrick Neary, the former chief executive of the Financial Regulator. At this committee he stated "I believe that all banks are solvent." However, Anglo Irish Bank was nationalised a short time later. These issues would not come under the terms of the Government inquiry.

The Government motion refers to appearances before the Oireachtas committee before and after the reports are completed. It also states that the terms of reference and a draft Government order establishing a statutory commission of investigation will follow the two reports. Those terms of reference would appear to be at the sole discretion of the Government. It is not allowing the Oireachtas committee to determine the terms of reference. The motion seems to infer that the Oireachtas committee will meet and brief the Governor and the independent expert at the outset on the priorities of the Oireachtas for the investigation. The two preliminary reports will be laid before the House and the Oireachtas will be invited to consider to findings of the report. However, those reports will be determined ultimately by the terms of reference laid down by the Government.

The people want a public inquiry. The Government has nothing to hide and nothing to worry about. We in Fine Gael wish to have cross-party co-operation on this. The Opposition leaders can meet the Taoiseach and come up with the proper terms of reference for an Oireachtas committee. A scoping exercise can be carried out prior to any formal work done by the committee. The Governor of the Central Bank made a clear recommendation and the Minister for Finance went to much time and trouble to ensure that he got the best possible appointment. We all agree that Professor Honohan is an excellent appointee, yet the Government has tried to water down his first recommendation. He stated that there should be a complete inquiry, but this is a fudge and a whitewash. It is like water flowing through four or five funnels, with the result being that there is no water at the end. The Government is trying to ensure that we do not have an open and transparent inquiry. The public is entitled to nothing less.

The Minister for Communications, Energy and Natural Resources tried to represent this as a public inquiry. The Green Party Members have been shouting from the rooftops over the past three or four days that they would accept nothing less than a public inquiry. They are either not on top of their game or they are rolling over, but this is certainly not a public inquiry.

We must look at the key issues, such as banking regulation. Professor Honohan stated at the Joint Committee on Economic and Regulatory Affairs in December that one of the key reasons for the failure of the banking system was lack of regulation. We also need to look at Government policy. We need to look at the legislation that was brought in and why it was enacted. The Financial Regulator only functions according to the legislation that is implemented. We must have an open system to find out why the bulk of the banking system may soon be nationalised. Why did we get to a position where the loan book of a major bank doubled between 2005 and 2007? Why are we in a position where young couples have 100% mortgages that they could not afford?

The Labour Party has brought forward a Private Members' Bill on compellability. We support it in principle, but we feel that it is possible to set up a committee without any further legislation to deal with Government regulations and policy on the banking system. I hope that when the Minister speaks tomorrow night, he will promise to take the views of the Opposition on board, we will have a public inquiry in the Oireachtas so that the people can regain trust and that we might have confidence restored in the banking system.

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