Chris Andrews (Dublin South East, Fianna Fail)

I am delighted to have the opportunity to speak on this matter because regardless of which side of the House one is on, we all agree the revelations in regard to our banking system and the lack supposed regulation, which was designed to protect customers and society, are truly shocking.

In common with many other countries, including the UK and the US, the Irish regulatory system failed abysmally to carry out its role which was to ensure the financial institutions behaved in a responsible manner. The true scale of the appalling state of our country's banks, as the Minister for Finance indicated, was beyond anyone's notion of the worst case scenario.

This week, we heard Irish Nationwide Building Society incurred losses of more than €2 billion. That is more than it ever made in profits, which is outrageous. I sometimes think the public believes Members of the House are somehow supportive of the banks. We are as outraged, angry and upset by the actions of the people in charge of the banks at that time. Likewise, the revelations in regard to Anglo Irish Bank and other financial institutions have shaken the public's faith in those at the top of the financial sector.

There are many different views about NAMA. My view is that it is the right course of action. It is bringing stability to the financial system. The Minister for Finance and the Department officials deserve great credit for the way they examined in detail every possible option available to them. NAMA has received the support of the IMF and the ECB which stated that measures in the legislation should restore confidence in the banking system, which is the case. The Minister highlighted the favourable reaction of the financial markets to the steps the Government is taking to address our economic difficulty, although I do not believe people in Ireland are as easily convinced. Greece has been forced to borrowed at 8% which shows the steps Ireland is taking are well regarded internationally.

The Financial Regulator failed to carry out his primary function. He did not regulate the banks which abused the trust shown in them. To say their behaviour was reckless is an understatement. The behaviour of some of those bankers was nothing short of criminal and the public is rightly outraged and shocked, as are Members of the House, as to how this was allowed to happen.

Internationally, there was a view that over-regulation and interference was, in many ways, anti-business or anti-growth but with hindsight, trusting the banks to behave in a responsible manner was the equivalent of allowing the lunatics to run the asylum.

Last week, UK Prime Minister Gordon Brown admitted he was not tough enough in regulating the banks. He agreed that an era of light touch regulation had grown in the UK. Likewise, we were not tough enough in regulating our banks. There is no question about this. However, I am optimistic that the new measures the Minister for Finance set out in the Bill will ensure that taxpayers will never again be held to ransom by the banks and that they will overhaul regulation in this country.

Mr. Elderfield, Mr. McDonagh and Professor Honohan appeared before committees recently. They gave everybody a shot of confidence. They have all performed exceptionally well. They are seen as independent and as being on top of their briefs. As I said, they have given confidence politically, economically and financially.

This Bill is the first 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. This is a detailed Bill with many different parts but the main component of the Central Bank Reform Bill is the merging of the functions of the Central Bank of Ireland and the Financial Regulator. This merger will create a single regulatory body. A Central Bank commission will be created and will be responsible for proper regulation and supervision of the financial services market, including regulation of the service providers.

I welcome the fact an Oireachtas committee will receive an annual regulatory performance statement. This is a sensible move and will ensure greater Oireachtas oversight and accountability. As the Minister highlighted, this step is consistent with the recent recommendations of the Comptroller and Auditor General in a special report on the Financial Regulator. Likewise, the Bill requires the bank to arrange regulator peer reviews of its regulatory performance at least every four years and to report on such reviews. The bank will also be required to prepare a strategy statement every three years in addition to its annual reports and accounts. There are many components to this Bill that will radically reform financial regulation, which is badly needed. It will slowly restore confidence in the banking system.

However, I do not believe that even now the bankers who caused the crisis fully appreciate the implications of what they have done. Last night, Richie Boucher bowed to political pressure to forgo his pension top-up. However, I find it unbelievable that Bank of Ireland, given its current financial situation, would have agreed to go ahead with this payment. People talk about contracts and rules and about how nothing can be done if these payments have been agreed in advance. However, how is it that private companies can change terms, reduce salaries and alter pension contributions in order to achieve savings? Our banks and those in positions of power need to understand that it is only because of the Irish taxpayer that they are still in existence and attempts to make pension payments and bonuses agreed in a radically different economic environment are simply delusional. The trust of the public is eroded each time a story such as the Richie Boucher one appears.

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