Brian Lenihan Jnr (Dublin West, Fianna Fail)

The capital requirements that I will outline presently to the House have been set by the Financial Regulator and announced separately by him in the past hour. That is as it should be.

We now have in place a more stringent regulatory system overseen by the Central Bank Governor, Professor Patrick Honohan, and the Financial Regulator, Matthew Elderfield. The new fully integrated structures replacing the Central Bank and Financial Services Authority of Ireland will be established in law by the Central Bank Reform Bill which I published earlier today. The new Central Bank will be responsible for maintaining the stability of the financial system, the effective regulation of financial institutions and markets and safeguarding the interests of consumers and investors.

The Bill enhances accountability of the Central Bank and oversight by the Oireachtas of its regulatory performance. I have included in the Bill a provision that gives the bank new powers to ensure the fitness and probity of nominees to key positions within financial institutions. This key provision will, from the outset, reinforce the tone of the new regulatory regime. It will help to restore confidence in the management of the banks at home and in the international markets.

A further Bill to be published in the autumn will contain additional new and enhanced regulatory powers and functions of the restructured Central Bank. A third bill will consolidate all existing statutory arrangements. Further details of today's Bill are included in the information booklet that will be circulated to Members. There will be consultation with stakeholders and the legislation will be enacted as soon as possible after Easter.

The detailed information that has emerged from the banks in the course of the NAMA process is truly shocking. At every hand's turn our worst fears have been surpassed. Some institutions were worse than others but our banking system, to a greater or lesser extent, engaged in reckless property development lending. In far too many cases there were also shoddy banking practices. The banks played fast and loose with the economic interests of this country.

Our previous regulatory system failed abysmally and it is right that the role of the regulator, the Central Bank and the Government is now the subject of independent inquiry-----

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