Paul Connaughton Snr (Galway East, Fine Gael)

I am delighted to take this opportunity to speak on the Central Bank Reform Bill. Millions of words have been spoken since that fateful night two years ago when the guarantee had to be given to the banks. It forms part of what I want to say. Irrespective of what is said in here, on any side of the House, there are questions to which every Irish person I know of across the country still has not got an answer. How could this disaster happen? Why did it happen? Who was responsible for it? Despite all the things we hear about and the various seminars and reports, nobody has answered those questions to the satisfaction of the Irish public. That is one of the reasons there is so much anger. There are some people in the rarefied atmosphere of Leinster House who must pack their ears with cotton wool when they go outside the gate. The anger across the country at what was allowed to happen to our banking structure is like a forest fire.

I do not say this lightly, but our banking failure must be the most abominable disaster to be inflicted on four million Irish people since the Famine. That is some statement. Even during the time of the economic war and all the records of history, I do not believe anything as serious as this was ever inflicted on the Irish people. Nobody seems to know how it arrived or how we will get out of it.

The problem with our small, but very proud, nation is that nobody is clear on the actual path on which we are to travel to ensure that we, as a nation, will have the freedom to do what we were used to doing. This is a very serious matter. I have been in the House a long time and have seen all kinds of disasters. Unless a multiplicity of things happen in Ireland and across the world we will have a very serious situation. Like everybody else I hope and pray that the green shoots about which we hear will one day become more than shoots and that the economy will work its way out of its difficulties.

In tandem with everything I think we should be doing, about which I will speak in a moment, I wish to refer to the night in September 2008. Many people want to know about the pressure which was put on the Government and on Minister for Finance by the banking fraternity - there is no point in going over it again here today because it has been spoken about a thousand times - as a result of the midnight run to the Department of Finance. If the Taoiseach, the Minister for Finance, Deputy Lenihan, and the Government knew on that night what they now know would they have acted in the same way? That is the important question to be asked.

I have no doubt the guarantee which was given for ordinary investors and depositors was one of the reasons there was cross-party support for the measure. It was an extreme measure to have to take but one could see its significance. The question for everybody is, whether on that night, based on the information, if any, which was available, Anglo Irish Bank should have been included in the guarantee. In the days following that decision, I put a question during the debate in this House to the Minister for Finance. He said he thought, based on the best available advice which he had at the time, that it appeared there was a smell of €16 billion in loans. We all know what that means.

That is a long way from what has happened. The figure given was for all banks; it is on the Official Report for anybody who wants to read it. It was only a guesstimate but it was wildly off the mark. It brings me back to the question of why nobody was able to identify how great was the black hole in Anglo Irish Bank for a year and a half. That takes some doing when one considers that the Minister for Finance came in here a couple of months ago and said he thought the figure was €12 billion. Lo and behold, a very short time later there was another €10 billion added to it. We are talking in huge figures for a small bank.

There is more of a paper trail at a bingo game in bingo halls anywhere in Ireland than there was in that bank. It was pure pocket stuff; there was no paper trail. That is why I could never understand why, when the Government decided to set up a banking inquiry, it finished on the night the guarantee was given. Everybody wanted to understand the reasoning behind why the guarantee had to be given and why the bankers were not there on that night or six months before that. What was the cause of everything that happen at that time?

Let us get some perspective on the €22 billion - we no longer talk about millions; it is now billions - which has gone into a hole and has vanished. The Minister of State knows as well as I do that there are projects which have been invested in that have showed a very poor return. In other words, a project might take 20 or 30 years to repay an investment. However, one will get it eventually and one would have something physical in its place which would be good for someone. The Government has pumped €22 billion down a hole for which no return is expected, and expects people who are taking the cuts to take this sitting down.

The banking institutions in this country were so influential, persuasive and bullying that no matter who was the regulator, no one was more powerful than the chief executives of the various banks and the chairpersons of the various boards. They went out of control; I have no problem saying that outside the House. There were no controls on them. They got it into their heads that because the economy was rising at such a high rate, they were Gods around which everything rotated. Many times over the years I heard people say that I should not criticise the banks because to do so would tarnish the image of Ireland abroad, stop our ability to raise loans on the international money markets and, in general, that I was a very bad Irishman to criticise the banking establishment.

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