Michael Mulcahy (Dublin South Central, Fianna Fail)

I too welcome this Bill. I also welcome the speech made by the Minister for Finance when he introduced the Bill yesterday. I pay tribute to the Minister. I have only been a Deputy since 2002 and was previously a Senator in the 1990s for three years. I have been a member of a local authority since 1985 and a member of Fianna Fáil since 1979. In all that time, I do not recall any Minister for Finance from any party having such a difficult or more challenging tenure or who acquitted himself or herself as well as the current Minister. Whether one agrees or disagrees with his policies, there is no doubt but that he has been extremely active and has risen to every challenge put to him, and done so very well.

I also pay tribute to the Attorney General and his staff. If one considers the various legal instruments and measures that have been required to stabilise our economic situation since September 2008, including the bank guarantee scheme, the recapitalisation of the banks, several budgets, the NAMA legislation, public service reform, setting up the banking inquiry and now the reform of the regulatory regime, one becomes aware of the incredible amount of activity and of legislation and Dáil procedural work that has taken place. It is a great tribute to the staff of the Attorney General's office and the officials in the Department of Finance that they have coped with such a huge volume of work in such a relatively short period of time. I challenge anybody to show me an equal period of time in the history of this State that required as much legislation or activity.

The Bill is the first part of a three stage legislative programme to create a new fully integrated structure for financial regulation, to enhance the powers and functions of the Central Bank and to consolidate existing legislation. The Bill dissolves the Irish Financial Services Regulatory Authority and creates a unified Central Bank of Ireland under the control of a single board called the Central Bank commission. The Governor, currently Professor Patrick Honohan, will remain solely responsible for the European system of Central Bank related functions and the Financial Regulator will be replaced with a statutory head of financial regulation. That post will be held by the current regulator, Mr. Matthew Elderfield. The Government has clear objectives - the maintenance and stability of the financial system, effective and efficient supervision of the financial institutions and markets and the safeguarding of the interests of consumers and investors.

Much of the Bill concerns the fitness and probity of persons involved in the financial services industry. It provides for new powers to be exercised by the bank to ensure the fitness and probity of nominees to key positions within financial service providers and of key office holders within those providers. This initiative will help restore confidence in the management of those institutions, both domestically and in international markets, something that may also arise with the financial service industry representative. Accountability is another major concern of the legislation. Annual performance statements on regulatory performance will be laid before the Houses of the Oireachtas and will be subjected to regular international peer reviews. A committee of the Oireachtas may call the Governor and-or the heads of functions to be examined on the performance statement. Responsibility for consumer information and education in respect of financial services will transfer to the National Consumer Agency, along with associated staff.

It is very easy in a discussion of large scale financial issues to forget some of the people most affected, those who have taken out mortgages. Many ordinary working people are finding out to their cost that our financial problems have real consequences, particularly in terms of their mortgages. The issue of mortgage arrears is one in which the Government is centrally involved. It has made it clear it will introduce new measures to protect families that are having difficulties with home mortgage payments due to the current economic situation. This is outlined in the renewed programme for Government.

A mortgage and Government debt group has been set up and the Government has already taken a series of steps to deal with the situation. It has provided financial help to over 15,000 families through the mortgage interest subsidy scheme, increased the advisory services provided through the Money Advice and Budgeting Service, MABS, introduced a statutory code of conduct on mortgage arrears for all the financial institutions and extended the six-month moratorium on legal proceedings to 12 months. It has also refocused mortgage interest relief on those who bought their homes at the peak of the market, with extensions up to the end of 2017. In 2009, there were only 28 forced repossessions of homes by legal process by State guaranteed lending institutions, which is a remarkable achievement.

I support this regulation and will support further, tougher legislation coming from Europe. However, it is obvious to me and should be obvious to the House that no amount of regulation will ever fully overcome the creativity of some ingenious people who wish to break the rules. Unfortunately, many financial institutions seem to have succumbed to the Wall Street dictum that greed is good. In America, the Securities and Exchange Commission, SEC, is a very powerful body with extensive powers and a large staff. However, that did not stop the people who caused the Enron or Bernie Madoff scandals and now there major questions with regard to the transparency and correctness of financial transactions within Goldman Sachs.

Those involved in the financial services industry must act morally. There is an injunction on people involved in handling other people's money and in selling financial products to act morally and not just to obey the rules. To obey the rules is not quite good enough because it is always possible to create a way around every rule. A message should go out from this House that people in leadership positions particularly in financial institutions have a duty to act morally and in good faith towards their customers or else they should get out of the business. It is as simple as that.

I agree with other speakers who decried legal contracts whereby various bankers feel they are entitled to large pensions or bonus payments. I do not want to mention any particular names but I want to make a point. Is it not time that the banks showed a little bit of moral leadership even if they have a contract? I know people across the floor will agree with this. They should recognise that people are living on less than €200 a week and who have genuine difficulties with feeding or clothing their children or paying essential bills. There are people who, if they are stranded abroad, cannot afford to come home. Many people are suffering serious economic deprivation, particularly arising out of the misdeeds of financial institutions. To those in financial institutions who will not show moral leadership I state that we will not forget it. They have an opportunity to break with the past and show the type of moral leadership required in this connection.

I disagree with some of the comments made by Deputy Costello of the Labour Party. The Labour Party states it wants to support the rebuilding of the economy but it has opposed at every stage every positive and constructive change introduced by the Minister. It did not support the bank guarantee scheme, the recapitalisation of the banks or the NAMA legislation which has been widely praised throughout Europe and by the IMF. It is time for every party in the House to come on-side and stop scoring points. This is above politics in the sense that Ireland must get back to a position of financial stability so people can get on with their lives and enjoy happy and prosperous lives. I strongly support the introduction of this legislation.

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