Eamon Ryan (Dublin South, Green Party)

The banking issue needs to be debated to allow us to check and revise policy. A year and a half ago, my first instinct, when I sensed the scale of the banking problem facing us, was that we should nationalise all the banks. When I informed the Minister for Finance of this he listened but in the end said "No".

In hindsight it was the right decision not to nationalise all the banks at once. A year ago it was clear to me we would end up with the sort of scale of State involvement in the banking sector that we have now, particularly with our larger banks, Bank of Ireland and AIB.

It was better not to nationalise all the banks because such an approach ran the risk of being a more expensive approach. By international comparison, the better approach was to find out the nature of the problem, the assets that needed to be managed and then to deal with the capital approach.

I would have had no difficulty, however, if we had to fully nationalise Bank of Ireland. It did not happen in the end and international markets gave the signal the other day that it will be able to work itself out of its situation. I hope the State will be able to make a significant profit if the bank returns to profitability.

In last Sunday's The Sunday Business Post, Deputy Richard Bruton argued that to deal with the biggest banking problem, Anglo Irish Bank, the loans should be forgotten while the bondholders should be allowed take the loss. I will admit that was my first instinct too. I would love the bondholders to take the loss rather than the taxpayer.

However, when one examines the details one has to question such an approach. Roughly €15 billion is held in bonds in that bank. Some €2 billion of it is short term with a turnover of one week. It is more akin to a deposit rather than a medium or long-term bond. However, the bank's annual accounts showed that of the other €13 billion of bonds, some €7 billion of them were issued since the bank guarantee in September 2008 and will come to an end by this September. Deputy Richard Bruton's argument that these bondholders would take on the debts if the bank were let go is not, therefore, correct.

I understand several other bondholders in the bank are in a similar position. The proposal of letting the bondholders take the hit after the guarantee expires will not work because the bondholders will not be there. Legal advice also points out they cannot be treated differently to other depositors such as the European Central Bank. After examining the maths of going after the bondholders, I have realised it is not a practical or realisable solution.

I welcome these type of debates, and further debates, because they allow us consider the options not in a party political fighting manner but in a genuine way. When we examine the figures and the reality of the position, however, much as I would like to pursue such an approach, I do not see it as realistic or possible. That is the reason I welcome the debate tonight.

See this speech in context