Tom Hayes (Tipperary South, Fine Gael)

I am pleased to have the opportunity to contribute to the debate on Second Stage of the Central Bank Reform Bill 2010. Second Stage is the opportunity to expand on our views and this debate gives Members scope to say many things that need to be said about the banks. Never before was Ireland in such a banking crisis. Never before were people as frightened because of such a crisis. The banks are central to all our lives. They are central to our Government, central to private enterprise and central to each one of us as we go about our daily lives, whether we rear our families or look after ourselves in our older years, whether it is to put a roof over our head, to buy our first car or whatever we want. We will always need banks unless we are in a very privileged position and most people are not in that situation. Ordinary folk have to go to the banks to get funding for education and for many other aspects of their lives.

We cannot underestimate the essential role the banks play in our daily lives and this is the reason we were so frightened when the banks got into trouble. People were at a loss to know what was going to happen their businesses. Small businesses were in fear because they were being denied simple lines of credit which they had previously received. Family homes were in danger of being repossessed. The terms of loans were being shortened and credit was being called in. The position of credit availability to small businesses was a significant worry. Young people in college who had taken out loans were very worried.

The attitudes of the banks will have to change. It is a very simple thing to say those at the top of the banking institutions should be in jail. I have heard this view expressed many times. There was a culture which allowed this crisis to happen. What of the regulators and the people who were in charge? I wonder would this crisis in banking, as we knew it, have happened 20 or 30 years ago? Would it have happened if there had been more say at the local branch level?

The local bank manager knew a lot of people in the area. This discretion and responsibility was taken away and given to people up the line. In the past, the local bank manager sanctioned loans for customers who wished to buy land or a house. His word was accepted. However, in the past number of years, the information on an individual is put into a computer and sent to headquarters. The regulator was supposed to be keeping on top of all these transactions. Instead, there was a major crash when things were done differently. Due consideration should be given to looking at the way we do our banking. I am concerned that we are now discussing this Bill before the review has finished. The legislation should not be changed ahead of the results of the review as this might allow for dramatic new ways of addressing the problem. The local bank manager should be central to the system. Just like the local garda or the local teacher, the local bank manager knows his or her people, their capabilities and their track records. He or she knows which are the people who will go through thick and thin to pay off a big loan. Each individual has a different attitude to paying back a loan. Some cannot live with the worry of outstanding loans to banks or building societies and get it paid off in a short period. Again, the local bank manager would be able to deal with this.

One reason many people and small businesses are in trouble is because of the non-availability of long-term credit. In the past, when one wanted to buy land, for example, one could get a long-term loan from the Land Commission. Land rent was paid on it over many years until one eventually owned the property. Such a system should be reintroduced. Instead of businesses being put under pressure to pay back their bank loans in a short period, credit lines should be extended.

Yesterday, the Garda Representative Association claimed some gardaí could not pay their mortgages. While not every garda, teacher, nurse or doctor is in such a position, there is small group who paid €300,000 or €400,000 for their houses because that was the going rate and it was sanctioned by the lenders. Deputy Finian McGrath spoke of the responsibilities of Oireachtas Members. Those having problems with large mortgage repayments must be helped.

In south Tipperary I know a family, who have had a redundancy and a pay cut, and who, to keep up with their repayments, would have to put nearly all their income into their mortgage while forgetting about paying for day-to-day living. Families in such positions should have their mortgages extended. It is just not good enough to say the banks are not repossessing homes.

The banking crisis affects every individual. We need to look after the small and vulnerable people who cannot sleep with the worry over their mortgages and repossession. They need advice and support. Legislation, tied to the Central Bank Reform Bill, must be introduced to help and protect homeowners in such circumstances. This is a small nation which has prospered much in the past 100 years. A roof over one's head must be made a basic requirement for everyone.

Small businesses need to be supported too. Some claim the only way to work our way out of our current economic problems is through creating jobs. Instead, we need to protect the existing jobs we have before we look at creating new jobs. Walking down the main street of any town, one will see a large number of empty retail units. This is not good for the economy. Those with ideas on how to keep such businesses open should be used to support them.

I cannot stress the importance of the local bank manager in assisting small and medium-sized enterprises. In the review taking place, a special section should be devoted to giving decision-making powers back to local bank managers. People have spoken about the importance of the credit union, a point with which I wholeheartedly agree. Fortunately, when bank credit has dried up, the credit unions have assisted many people with loans. The role of the credit union should never be underestimated and we must help them in any way we can.

Out of all of this banking crisis with the fears and frustrations experienced by people, we need to give hope. People are concerned about the future. We need to send out a signal of hope and the availability of credit is one way of doing so. Young people, those finishing their degrees, building a home, choosing to work in either the public or private sector need hope for the future. They need to know there will be money available to fund education, the health services and other economic activities.

Only yesterday, I was informed by my local hospital manager about the number of young qualified health personnel who will leave the country to work elsewhere. Some hospitals, as a result, will have to go on short time. So much of our society, not just economic activity, is taken up by the banking crisis. We must send out a message of hope to our young people so that they will see Ireland as a good place in which to work, live, build a house and rear a family. They should be able to do what our generation did. We were a lucky generation born in relatively good times, receiving a good education and having a good standard of living. We had hope and believed this country was a good place in which to live.

This message needs to given to our young people like the young lady I came across the other day. After college, she has spent the past 12 months looking for a job but to no avail. She is now thinking of emigrating to Australia. This lack of hope has to be changed. The Government and Opposition needs to bring hope back to the country. We need to be more proud of what we have done.

Everyone will condemn some of the shenanigans that went on in the banks and say they should never have happened. The regulators must, however, wake up to the new banking position of centralising all decision-making. The bankers must get up off their cushy soft seats to come up with more proposals for better banking. They must stop this move towards globalisation, making everything big and sending it to the top. Banking must be brought back to local communities with decision-making processes resting with local bank managers. Ireland will be much better if we change our attitude and not make everything big. Making the health service big turned what was once a good health service into a disaster.

The same applies to the banking sector. We made it big. We gave all the responsibility to the regulator and let the banks off. We brought in all this regulation but it was not implemented. The small fellows on the ground lost their importance and their role.

I am pleased to have my say on what should happen to our country in terms of our banks. For all our sakes, and the sakes of generations to come, it is important to ensure the right measures are taken. In politics the Government puts forward its proposals and the Opposition gives its view but I believe a genuine attempt was made in this House to do what is best for the country. Any comments made by those of us on this side of the House were made sincerely. Likewise, the Government but at the end of the day we want to do what is good for the citizens of Ireland and their future. I am pleased to give my view on what must happen but we must move away from the days of passing the buck to the authorities at head office and bring responsibility down to local level. That would have a positive impact on future issues in this country.

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