Mattie McGrath (Tipperary South, Fianna Fail)

This Bill is of major importance to the House and I welcome its publication. The Central Bank Reform Bill is the last step in a series of measures the Government has introduced to stabilise the economy and rescue the banking system from the brink of collapse. The Bill, which is complex in nature, will be introduced in three parts. It proposes to maintain the stability of our financial system, provide for the effective and efficient supervision of financial institutions and markets and to safeguard the interests of consumers and investors.

The causes of the current crisis have been subject to intense speculation and debate. However, we all agree regulation failure, or a lack of regulation, had a major role to play in bringing about our current difficulties. The former Financial Regulator, Mr. Neary, failed in his duties. He took his eye off the ball and let us all down. In fact, I would say he did not go to work at all and that his contract was not fulfilled. I would question his remuneration and payment for such a lack of work.

Barely a day goes by when another story does not appear in the press highlighting bad practices and immoral behaviour by former bankers. This week we learned about Irish Nationwide Building Society which was giving out 120% loans. That type of behaviour was crazy and criminal. It appears some of the extraordinary successes the banks experienced during the boom years were built on a house of cards and on quick sand. While I share the outrage and disgust of most people about what went on, I realise anger is not a policy and that we need to work out our future. The Bill is of major importance because it addresses the systematic failures which have brought us to this place. It addresses the inadequacies in our regulatory system, or our lack of any regulation.

The appointment of the independent expert, Professor Patrick Honohan, as Governor of the Central Bank and Mr. Matthew Elderfield as Financial Regulator demonstrates to the banks and the markets that the era of light touch regulation is well and truly over. The Central Bank will be responsible for the stability of the financial system, prudential regulation of financial institutions and the protection of consumer interests.

In his impressive performance before an Oireachtas committee on which I sat, the Financial Regulator, Mr. Elderfield, spoke about how new senior personnel would be vetted regarding their fitness for office before being appointed to key positions within our banks. However, I was a bit concerned to see some senior personnel from the old regulator's office accompany him to that meeting. He would need to apply this wish to his own new role as well. He has requested more staff and I hope he gets them as he needs them to do his work.

The Bill also ensures annual performance statements on regulatory performances which will be laid before the Houses of Oireachtas and will be subject to regular international peer reviews. This is a very welcome step. There is a commitment to openness and transparency and this is commendable.

I cannot understand how gentlemen like Mr. FitzPatrick and Mr. Fingleton and cabals of friends were allowed to do what they did, get us into this position and are now allowed to walk free. I fully appreciate that every man or woman is entitled to his or her freedom and the presumption of innocence of any charge, unless otherwise is proven. However, these people must be brought before the courts, made accountable and defend what I believe is the indefensible, but we should let the courts of law decide.

I speak on behalf of small and medium-sized businesses, which are on their knees. They are the backbone of this country but are not supported by the IDA, Enterprise Ireland or anybody else. The people who set up such businesses provide employment for themselves and their families and then go on to employ up to 20 people. These people are crippled with regulation.

I also speak in a voluntary capacity and refer to the amount of regulation implemented in recent years. I sit on a number of voluntary boards and to change a treasurer is almost a week's work. One must sign so many forms that one would think one was getting part of a bank. The little people were crucified by regulation while the eye was completely taken off the ball in regard to the big people.

Another issue I have relates to the total lack of respect. I am not talking about the ordinary bank workers or officials but about senior bankers from middle management upwards. They show a lack of respect for public representatives, the general public, customers and, in some instances, the courts. Court dates are set to bring a customer to court. The customer feels he or she will have his or her day in court and will employ legal people to defend himself or herself and perhaps trade out of the difficulties but eight to ten days before the court date, the bank will appoint a receiver. That is outrageous behaviour.

My colleague mentioned landlords and the colonial system. Cromwell did not get away with that kind of behaviour, and we know what happened him. These people do what they like. We talk about tiger kidnappings, which are atrocious. However, I believe the tigers were in charge of the banks and kidnapped the public. They continue to hold us to ransom every day and it will take a significant sea change for them to get their paws off the backs of the ordinary people. It seems they have no intention of doing so, despite Government efforts, the Financial Regulator and so on.

A couple of weeks ago we heard about the increases in salaries in Anglo Irish Bank, which brought us to this mess. I did not see that bank on any high street in any town in my constituency. It was a bank for the rich which created cabals. Unfortunately, other banks followed it and allowed us all to get into this mess and it will take us generations to get out of it.

I have argued long and hard for a total clear out of the senior management and the boards in the banks. In recent days, I was appalled to see that the person who is the subject of this pension increase was a former employee. These people should have had their comeupance long ago and been removed.

The recent increases in salaries in Anglo Irish Bank, the pension top-up in Bank of Ireland and Mr. FitzPatrick's family member getting a loan subsequent to the guarantee scheme demonstrate that these people have total contempt for the Houses of the Oireachtas and for any sort of regulation. Common decency ended a long time ago in these institutions.

As I said, there are many decent people working in the banks but their jobs are in peril and they face the wrath of an angry public. I feel sympathy for those people. This situation is untenable and must be discontinued. Light touch regulation should not have existed. It did not apply to the ordinary customer, the ordinary working man or to community committees, or enablers as I call them, trying to better their communities. It did not apply to small business people who worked hard to build up a reputation with their banks and to gain overdraft facilities.

Although legislation is in place to provide that both the major banks must lend €3 billion annually, when will they do this? There is an old saying tosach maith leath na hoibre but they have not started at all. They produce false figures of loans given out. The loans have not been given out and the figures are wrong. Most people who contact their bank are not even given an appointment but are instead told to forget about trying to secure a loan or overdraft facility or paying their employees because the banks are in a perilous position. Those in charge of the banks informed the Joint Committee on Finance and the Public Service that they would look after the banks first once the National Asset Management Agency had been established. They were blatant about this. The banks are looking after themselves rather than members of the public.

As I stated, the tigers - I could describe them in much worse terms - are in the banks and we need to get them out. While I hope we will do this in a fair and reasonable manner, it must be done by whatever means. Members of the public are not happy and will not put up with blackguarding, cronyism and the rest of what is being done for much longer because they are at their wits' end. We must get the economy back on its feet and show the world the country is run in a decent manner rather than by the cabals which previously ran the financial institutions.

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