Noel Ahern (Dublin North West, Fianna Fail)

I listened to the contributions by some earlier speakers in this debate some of which were thoughtful and interesting. Deputies Noonan and Rabbitte in particular made thoughtful, wise and reflective contributions looking back over their time in Dáil Éireann. I will exclude from that the contribution by the Labour Party spokesperson on finance because she engaged in approximately 20 minutes of finger-pointing.

Over the years a trend has emerged where an architectural framework is constructed and then dismantled because it is considered not to have done what was intended. We now appear to be repeating this exercise with this Bill. The 2003 Act established the Financial Regulator as an independent regulator within the Central Bank and the Financial Services Authority of Ireland, reporting both to the board of the Central Bank and the Minister for Finance. At that stage the regulator was to be responsible for the regulation of most of the financial service providers in Ireland, including the credit unions. I received a detailed letter from the credit union movement, the content of which can be addressed on Committee Stage. The credit unions see this as an opportunity to make their input.

Prior to the establishment of the current regulatory system, responsibility for regulation was spread over a number of different bodies and codes. This Bill is part of a three stage legislative process to create a new, fully integrated regulatory structure.

The previous speaker stated that this is the first of three Bills and that these measures should have been introduced six or 12 months ago. However, some of his colleagues said the very opposite last week. They questioned the reason for this new and completely integrated structure when the banking inquiry has not been held. They argued for the introduction of the broad architecture but stated that we should not go too far at this stage. Many people know what went wrong but we should wait for the report of the banking inquiry to pinpoint the weaknesses so that this three-point legislation will take them on board. The Minister has announced two further pieces of legislation to make up the complete framework. I am sure by the time they are progressed through the House that the banking inquiry will have done its work and its recommendations will be considered in that legislation.

The issue of regulation has developed over time. Now everybody is calling for more and stronger regulation both in banking and business, whereas a few years ago the trend was to have less regulation in farming, business, cottage industries and many other areas. Speakers both inside and outside the House questioned the involvement of the State and argued for less State interference. They questioned why the State was depressing initiative, flair and innovation. The Fine Gael Party and the Progressive Democrats would have been big into the mantra of there being too much regulation across society. We may have agreed with this view at different stages until the banking crisis blew up in our faces. If some of those speeches were read again, many of us might be embarrassed at the statements we made from time to time.

Speaking from the Government side of the House, it is easy for the Opposition in many respects. It is changing tack now and blaming the Government for not sorting out the statutory officers, the regulator and the Central Bank and for failing to prevent the banking crisis. All of a sudden, the regulator is God. I note the suggestions made a few weeks ago that if any Minister telephoned the regulator or mentioned anything to him, this might be deemed to be a form of pressure. Suddenly, it is inappropriate to curtail the regulator in any way.

It is very fashionable to bash the old regime and the former regulator. There is no doubt that things went horribly and drastically wrong on his watch. I never met the man but at times I was a little concerned about him. The architecture of the system - a phrase everyone uses - was set up after much discussion and departmental and political disagreement about what should be set up. He was told to do his job but he was asked to bear in mind that the Central Bank was not to be upset. It was a case of walking on eggs in his case. It was not desirable to have inter-agency or inter-statutory officer rows and it was a case of doing the job without getting in one another's hair and attempting to co-operate.

The current attitude is that the regulator is supreme and one cannot say boo to him, so to speak. We always seem to go from one extreme to another. I refer to comments about extra resources being required by the regulator. I ask the Minister to clarify the staffing levels in the regulator's office. Some people think the regulator consists of one individual. I have heard figures of 600 and 1,100 staff in his office. Before the Government approves another couple of hundred staff, I suggest it examines the structure of the sections in the office. For example, a few years' ago, a business in my constituency complained to me that it was being put out of business, more or less, by the former regulator because there seemed to be a lot of bureaucratic nit-picking. If the section controlling the banking sector is short-staffed, I suggest staff could be moved from other areas.

Members will have received many e-mails from employees of the Quinn Group. Suddenly it is all to do with proper and strong regulation. Ministers make announcements about new multinational companies setting up in Ireland or the expansion of existing companies and there is often much hullabaloo about 50 or 100 jobs being created. We are very pleased to see new jobs being created, yet we might be about to lose several hundred jobs in the Quinn Group. There is almost a delight in certain quarters that we are correcting bad practices but I wish we moved more slowly. I acknowledge more regulation is necessary and that the system failed but I would hate to think that because the mantra or the mood changed, we put hundreds of people out of work when a slightly more joined-up Government approach would save those jobs. I agree we had to stamp out weak practices and weak regulation but I wish these things could be done gradually.

Many people are of the view that the former regulatory system was meant to work. I compare it to the talk about the volcanic ash last week in which case there was supposed to be a system and a plan in place to deal with all types of events and along comes an unprecedented event and nobody knows what to do. Situations are not always as easy to handle as was expected. When I was a Minister of State, I observed a few cases where it was difficult to get the political system, the statutory officers, the Department of Finance, the regulators or the Central Bank to recognise that a problem was brewing. I recall doing my best to discourage 100% mortgages and their ridiculous marketing whereby people walking down Grafton Street at lunchtime were encouraged to take out 100% mortgages on what was almost an impulse buy. Some of the statutory officers at the time noted my views but suggested I should revert to them when I had verifiable data to prove my point.

It would be a bit like me taking out a grenade, pulling the pin and throwing it down into the well of the Chamber. Obviously, only one thing will happen – it will blow up. In such a scenario, statutory officers, however, would be inclined to say "Yes, yes, yes, let me know when it does blow and tell me what the damage is" while everyone else would say, "Jesus, that thing down there is going to blow". Likewise, statutory officers would claim the concerns about lending were only a hunch and that we cannot base major policy decisions on a hunch. They would ask one to come back with evidence-based research data, compiled by an accounting consultant, which would take a year anyway.

Some Members referred to Irish Nationwide Building Society, INBS. Last week, Deputy Gilmore asked the Taoiseach if he ever heard any rumours or whispers about the building society when the Building Societies (Amendment) Act 2006, which would allow building societies, including INBS, to demutalise, was introduced. I was involved with the legislation as a Minister of State and at the time there was a complaint from the Ombudsman concerning overcharging. Apart from that, there were no other issues of concern.

Deputy Gilmore, however, was egging on the Taoiseach about the chit-chat around the Houses and elsewhere at the time. As we all know Michael Fingleton ran INBS like a personal fiefdom. We never heard mention of any other senior officers or a board of directors there. Michael Fingleton was very much into self-promotion and, therefore, promoting his building society. I have often heard from colleagues about the widely held view around these corridors that for a journalist or a politician looking for a loan or mortgage for himself or anyone else, the friendliest and most accessible person in financial institutions was Michael Fingleton. The bigger the fish one was in the media or political pond, the more personal the attention one received. If one were a really big fish like a Minister or a correspondent, one might have even got a personal telephone call from Michael Fingleton informing one of a loan approval.

There is no doubt Michael Fingleton had many media friends who he worked well over many years for his own publicity. I often heard it joked that most members of the Press Gallery, not necessarily those in the class of 2010, got their mortgages from Irish Nationwide. I have no self-interest since my mortgage was with the EBS. However, Michael Fingleton, as everyone knows, was approachable and did many favours for many people in here and up there in the Press Gallery, as well as in other places. There is no doubt as he moved on from mortgages to property, land and development that he totally lost the run of himself, ending up in disaster for the taxpayer and, indeed, for many of his clients.

I recall before we passed the Building Societies (Amendment) Act 2006, Members were popping up every morning on the Order of Business asking when the legislation would be introduced because their constituents were on to them about when they would get their free shares from demutualisation and make their fortunes. Unfortunately, the money many of these constituents were going to get, as well as much more, has gone up in smoke. No one can condone the absolute mess made by some of the banks and building societies in recent years.

Some Members referred to whether Anglo Irish Bank should have been sold last year or kept going forever. This is a non-argument. We could not have announced we were going to close it in September 2008 because there would have been a run on the bank which we would not have been able to handle. Equally, I do not believe the bank will be there in its totality in 15 or 20 years time. I am sure we will either sell it, reduce its size or put up a new sign over its door calling it "The Happy Bank". It is a bit of a non-event. With a bank like Anglo Irish, one has to keep it going, control it, examine its strengths and weaknesses. I am sure the Government and its board of directors will decide what to do with it. Most of it is a disaster case but there may be segments that could be developed, expanded or sold off. It is a bit of a non-argument wondering what to do in the long term.

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