Finian McGrath (Dublin North Central, Independent)

I am grateful for the opportunity to speak on the Central Bank Reform Bill 2010. This is an important debate and we should be focused on solving the urgent crisis in our banking system and the economy. The banks and big businesses have disgraced themselves and let down the people of this country. Shame on them for their irresponsible actions and I hope we see justice soon.

The purpose of this Bill is to create a fully integrated Central Bank with a unitary board, the Central Bank commission, which will be chaired by the Governor of the bank. The Irish Financial Services Regulatory Authority will be dissolved and most of its existing functions will be merged into the new structure. The Central Bank is responsible and accountable for the prudential supervision of individual financial firms, the conduct of business, including protection of consumer interests, and the stability of the financial system overall.

Recent events have undermined consumer interest and destroyed the stability of this great and beautiful country. Once known as the land of saints and scholars, Ireland today is better known as the land of scandals and tribunals. Politics, banking, the church, business, medicine, the law and the Garda have suffered from an erosion of public confidence in the wake of astonishing scandals. Over the past decade, Ireland has undergone rapid social, economic and political changes which have had a profound impact on our value systems. For example, the decline in the Catholic Church's authority and influence has forced many people to seek other sources of ethical and moral guidance. Ireland was fairly prosperous at the beginning of the 21st century but this created dilemmas in regard to the distribution of resources and the tension between the rights of the individual and the overall good of society. The people to whom we once looked for guidance, namely, the political elite, the church, the medical establishment, bankers and business leaders, have had their credibility tainted by damaging scandals.

I have raised these issues on previous occasions both in the Dáil and in wider society. I voted against the budget because I believed it was unfair. People with disabilities and their carers faced cuts of 4%. Recipients of blind pensions suffered a drop in income of €450 per year. This is not social justice. The elite took a 5% pay cut while their office cleaners took a greater cut. Public servants were attacked and vilified by some politicians and sections of the media and attempts were made to divide public and private sector workers. I am trying to end this division. I am also fighting hard for the hard-pressed mortgage holders and I will continue to fight for a better future for us all. Our future must be built on equality and justice.

As an Independent Deputy, I am open to the idea of a national Government which would deal with the economic crisis. Such a Government would present an opportunity to select talented Members from various parties who would put their country first. I would be interested in hearing my colleagues' views on this issue. We have to pick the best people to solve this crisis.

Section 11 of the Bill provides that orders and directions of the Irish Financial Services Regulatory Authority which are not yet spent remain in force and that the Central Bank can enforce them. Section 12 provides that inquiries and assessments being undertaken by the Irish Financial Services Regulatory Authority may be completed by the bank. Section 13 provides that where the Irish Financial Services Regulatory Authority was involved in a legal action, including where the authority was undertaking a prosecution, these continue with the Bank substituted for the authority.

These provisions bring me to the big issue of light and heavy regulation. We have seen the negative impact of light regulation in this country. We have seen businesses go down the tubes and corrupt bankers, developers and others leading young couples and families astray. We have also seen politicians failing to give leadership on this issue. People were not doing their jobs - that is the reality, which we must face. If a person is appointed to do a job in the interests of the taxpayer or the State, that person has a statutory duty to do that job.

I question some of the past practices in regard to regulation, which is also very relevant to today's debate. I ask the Minister, the Government and all the political parties, and our new watchdogs over the banks, to keep a very close eye on what is happening. Recent days have again shown that we need to be extremely vigilant in regard to this issue.

I welcome the appointment of our new regulator, who is making an effort to do something about this. I strongly support his view in regard to many of the problems we are trying to solve. However, where there is regulation, there must also be common sense and proper process and proper systems in place to deal with the issues. I met the staff of the Quinn Group earlier and I was impressed by their professionalism and commitment. We must ensure we try to protect these jobs. The deadline is on Friday. I say to the staff and those involved in this issue that it is a duty of Members of the Oireachtas. The staff made the point to me earlier today that while they fully support the regulator, they would also like to see proper process and the common sense that is needed to save these jobs. As I said, Friday is D-day for those staff.

Part 3 of the Bill provides the bank with the power to regulate sensitive or influential appointments in regulated financial service providers, including the power to direct that a person should not be appointed to perform a controlled function or should be removed or suspended from the performance of a controlled function where the bank is satisfied that the person is not a fit and proper person to perform such a function. I welcome this aspect of the Bill, which is the way forward and the type of measure we need. The bottom line is that we must bring trust and confidence back into the banking system. We cannot move forward or deal with the issue unless there is trust and confidence.

Sadly, in the past year and a half, that trust and confidence has gone. The Members of the Oireachtas - I include all Members, including the Independent Deputies - must ensure we play a part in trying to regain the trust and confidence of our people. There is a lot of anger and negativity. We have to show leadership, which is why I again put on the table the question of a national Government. Perhaps we should, for a couple of years, put in the best people in the country to get us out of this mess. We can then go back to party politics.

Independent Deputies like myself are always open to new and radical ideas. Of course, I would have certain conditions in a situation like that, namely, that there is a strong commitment to social justice and to the weaker sections of society.

With regard to the debate about regulation, I emphasise the need for trust and confidence. At present, many of us are trying to debate how we fix the banking crisis. We do not like what we have seen but we have to fix the mess. I urge all politicians to consider this when debating the issue. Of course, there were many times when it turned my stomach when this issue arose in the House. However, when I looked around honestly and objectively, I saw no credible alternative.

As far as I am concerned, bankers, developers and corrupt politicians should be charged or prosecuted for ruining our country, but, as I said, we also have to deal with the mess. There has to be a major clean-out of the top positions in banking. I welcome some recent developments, including the proposal for targeted lending of not less than €3 billion each from Bank of Ireland and AIB for new and increased credit facilities for small businesses in 2010 and 2011, which is a sensible solution. I also welcome that Bank of Ireland and AIB must make available €20 million each for seed capital to be provided by Enterprise Ireland, which is the kind of proposal we need to see on the table. In addition, the two banks will each set up a fund of up to €100 million for environmental, clean energy and innovation projects. I welcome the sections dealing with credit review processes for banks as a sensible option.

While we are discussing this issue, let us remember the 15,000 families who are helped through the mortgage interest subsidy scheme. It is important to recognise many of these were victims who lost their jobs and find themselves with huge mortgages to pay. Many of them turn up at our clinics on a regular basis. At least we are making some sort of effort to help them in regard to their mortgages. I firmly believe no legal action should be taken against genuine householders and borrowers.

The deposit guarantee scheme that covered €100,000 per depositor per institution was a very relevant measure at the time. We have to fix the banking system or we are going nowhere, and those that say otherwise are misleading the people - that is the bottom line. I voted to assist our country even though, at times, some of the decisions turn my stomach. There was no other option. The people are demanding solutions, not cheap political soundbites. That is the sad side of this House. I saw an opportunity for Deputies to unite to try to help each other to solve the financial crisis but I was disappointed when I heard soundbites from many of them. It is up to all Members of the Oireachtas to put our people and our country first, even if it is not popular.

With regard to the Bill, the explanatory memorandum notes that item 22 of Schedule 1 inserts a new section 5C into the Principal Act. It provides that the bank will have the power to undertake and publish studies, analyses and surveys into the provision of financial services. In doing so, the bank has the power to compel the provision of information or the attendance before an employee or officer of the bank by a person who is relevant to the undertaking. Failure to co-operate is an offence, which I welcome. In addition, the head of financial regulation may cause an investigation into a relevant person. Failure to co-operate with an investigation is also an offence. Conviction on indictment under this section could result in a maximum fine of €30,000 and-or imprisonment for up to five years. Summary conviction could result in a fine of up to €3,000 and-or a maximum prison term of 12 months, rightly so. Item 22 is an important part of the Bill.

We must face up to the reality and deal with white collar crime, which clearly took place in this country in recent years. If a young person in Coolock or Donnycarney was involved in petty crime, he or she would be banged up in Mountjoy Prison for six months. Here is a situation where people were involved in much more serious crimes and we must respond. We must see the justice system kick into action on this issue. Low paid workers come to my clinic who have been turned down for carer's allowance because of a couple of euro here and there, and it gets up my nose that we see these guys - the senior bankers and white collar criminals - walking away scot free after damaging this State to the tune of hundreds of millions of euro. Where is the justice in that? Where is the social justice if we do not stand up for the decent people of this country? I raise this issue because I have been deeply involved in campaigning on the carer's allowance issue and with regard to disabilities generally.

With regard to the blame game, in my speech today I have referred to many situations, professions and people. However, many more were involved in this game, although one does not often read it in our national newspapers. Many others were involved in housing, in crazy investments and in misleading young people, and they must be challenged. They made a contribution to the downturn.

It gets up my nose when I hear people blaming all politicians and saying "You are all the same". We are not all the same - that is the bottom line. The vast majority of Members of the Oireachtas, across the parties, are trying to do their best for their community and their constituents. Yet, we have the label brigade and the blame game brigade lashing out every night on the television and in the media. The Deputies in this House want to serve their country and serve the people. My experience in this House is that the vast majority of Deputies are in that direction. Anybody who has another agenda should be rooted out of the Houses of the Oireachtas. I say this because it is very relevant to the banking debate today.

With regard to Chapter 2A, dealing with finance and accounting, section 32C provides that each year the bank is to give an estimate of the costs associated with, and the income from, its activities in regulating financial service providers for the coming year to the Minister for Finance. Section 32D sets out the powers of the bank to impose levies to finance its activities with regard to financial supervision. Section 32I requires the bank to prepare and keep accounting records and to transmit to the Comptroller and Auditor General a statement of accounts within six months after the end of each financial year. Section 32J provides for reports to the Minister of operations and returns of the bank within six months after the end of each financial year. Section 32 is about accountability which is crucial. In the past there was no accountability. People were not doing their jobs and other people were ripping off other people. I hope these issues are raised in the debate.

Part 7 of the Bill provides for the amendment of the Credit Union Act 1997, to take account of the dissolution of the Irish Financial Services Regulatory Authority and the creation of a unitary structure and to amend the provisions of section 35 of that Act. Section 35 of the Credit Union Act 1997, limits credit unions in the area of longer-term lending. The issue of the credit unions arose during the NAMA debate. The credit unions have made a significant and positive contribution to Irish society. I was a founder member of the INTO credit union. However, some people in the credit union movement acted irresponsibly and did not act in the interests of the members. There must be vigilance at all times.

Currently under section 35, a maximum of 20% of a credit union's loan portfolio may be outstanding for periods in excess of five years and only 10% of the loan portfolio may be outstanding for periods exceeding ten years. It is proposed to relax these limits.

Part 10 provides for the amendment of the Insurance Act 1989, to take account of the dissolution of the Irish Financial Services Regulatory Authority and the creation of a unitary structure. The amendments also permit the bank to appoint employees or other suitably qualified persons as authorised officers for the purposes of the Insurance Acts.

I emphasise the importance of the Quinn company to the economy of the State and I support the staff. Even though the problem does not directly affect my constituency I see it as a company with potential. I met the staff today and they are making a massive contribution. This is not a party political issue and we should be united in our attitude to the company even if it does not directly affect our communities. I support the staff and I will be willing to help them in any way as an Independent Member of this House

Anyone who does not have the bottle to deal with the banking crisis should not be an elected Member of the Dáil. The Irish economy is experiencing one of the worst recessions of any developed country. Unemployment which stood at 5% in 2008 is already forecast to reach 14% by the end of this year. This is a very sad situation for the 435,000 unemployed people.

I receive many CVs from young people hoping to find work in my constituency. A total of 100,000 are expected to leave Ireland over the next two years, that is 50,000 a year. We are losing many graduates who are going to England, Australia and America.

I refer to some ideas to solve the crisis, such as the idea of a national government. I also support the Labour Party Private Members' motion for the establishment of a strategic investment bank with the primary objective of investing and lending for national economic development, including investment in infrastructure and the enterprise sector. I will support sensible ideas.

I hope that we can all work together to clean up the banking system once and for all and lead this country to a positive future. To those in banking, I say that management is doing things right; leadership is doing the right thing. All Members of the Oireachtas have to show leadership and they should get out of Dáil Éireann if they do not wish to do so.

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