Brian Lenihan Jnr (Dublin West, Fianna Fail)

I will tell Deputy Burton why. I was speaking of the banking sector. An inquiry into banking is under way, which I welcome and which will be productive. The Joint Committee on Finance and the Public Service had an opportunity to meet Mr. Regling and Professor Honohan. I have had an opportunity to meet Mr. Regling and I meet Professor Honohan on a regular basis. I believe they will do outstanding work in this scoping inquiry which will inform the debate which, I hope, the joint committee will have on the causes of the banking crisis.

However, it was clear to me, as Minister, that the fact that the various actors within the banking and regulatory system knew each other well in a small country did not help in maintaining a proper regulated banking structure. The new regulator, Mr. Elderfield, has already made a tremendous impression in the short period of his appointment. It is certainly the legislative intention, in the context of the Central Bank legislation, to put him in a position of unquestioned independence. I believe very much in respecting that independence, in letting him make his own independent judgment on the important questions that face us, including the question of what capital will be required in the banking system as a result of the acceleration of losses which take place through the operation of NAMA. He will have to make a determination on the capital question and I will accept that determination, and we will have to act upon it as a State. Those are the choices that face us in the weeks and months ahead. They will be taken so that the banking system and structure in this State is reformed and repaired and put in a position, as Deputy Burton correctly states, to support businesses and to ensure that jobs are created in this country.

It is all too easy in the context of banking to have recourse to populist argument. The reality of the position is that the Government has had to deal with a very difficult position since September 2008 and has done everything in its power to prevent that system from becoming imperilled. Everything we have done has been to protect the financial stability of that system. Were the stability of that system not maintained, we would have a far greater loss of jobs and businesses in this country than we have already seen. What we have seen, as Deputy Burton correctly states, is serious enough.

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