Billy Timmins (Wicklow, Fine Gael)

One of the mysteries in the whole banking crisis and property difficulty is why we did not see it coming or know about it. Almost everybody surfed the wave, including many commentators who appear to have the solutions today. I do not ever recall reading in the Economist Intelligence Unit's reports where Ireland was heading. Perhaps someone will tell me I am incorrect, but I cannot recall seeing it.

One of the reasons we did not see what was happening was that we all spoke in terms of property. We spoke about the rising price of property – the property bubble. However, this was not a property bubble but a money bubble – the free and easy availability of money. History shows that when assets grow at an extraordinary rate, something is actually wrong. This is a weakness in our system, not necessarily the regulatory system but in our political system. Time and again during the ten years I have been here, I have spoken about the necessity for futurologists and people in Departments, no more than those in normal business, to project what is going to happen in the future. Maybe we should consider having a ministry for forecasting, in which this responsibility would be given to one Minister. Everybody is so busy in their day-to-day lives with crisis management.

The public, and even we in the Opposition, like to see things working. We like to see the country do well, and we would like to see the measures introduced by the Government working. However, time and time again we have sat here and listened to pronouncements, predictions and commitments which have fallen through sand. Often, these assertions are made in a confident manner but without confidence and without any significant basis. It is a major weakness in our system. Surely we could amalgamate various sections of our Departments to form one which would deal purely with anticipating the difficulties ahead on the macro scale, as opposed to the micro scale. It is a case of not seeing the wood for the trees. That is one of the main reasons we are in the current situation.

If we look back through history, we will see asset bubbles as far back as the South Sea bubble and the tulip mania in the Netherlands. These show us what can happen when assets are overvalued. The purpose of this Bill is to put in place a domestic regulatory framework for financial services, giving rise to stability, proper supervision and confidence and thus protecting the interests of consumers and the country. Our regulatory system clearly failed us, but we do not know why because we have not had a proper inquiry. We have had a few scoping inquiries but thus far we are not sure why it happened. There are mixed views on this. Perhaps our system did not fail us, but rather the culture, and individuals failed as a result of that culture. This new Bill will give us a Central Bank commission and the Oireachtas will receive an annual regulatory performance statement.

Almost a year ago, Fine Gael introduced a policy document on reform of the committee system. We can talk about sending things to committees, but the committees do not have the resources to deal with them. We have too many committees. Some Members of the Houses are on five or six committees and, as a result, they are unable to take their duties seriously. They are running from one committee to another and they are not prepared for meetings because they do not have time, and neither do the committee secretariats. We must halve the number of committees. We need to strengthen the Joint Committee on Finance and the Public Service and make sure the Committee of Public Accounts works effectively; we also need an enhanced Joint Committee on European Scrutiny. However, we must consider amalgamating committees so that each Member is on only one committee. Committees should also be staffed in a manner that ensures they meet their requirements. At the moment the system is dysfunctional, as everybody in the House knows, and there may also be a suspicion outside the House that this is the case. It is a disgrace that we are actually participating in a system we know is dysfunctional, and it is a reflection on us in the House.

The consumer information function will be transferred to the National Consumer Agency. Fine Gael moved an amendment on Second Stage of the Bill declining a Second Reading, as discussed by Deputy Doyle in his submission, because we do not have an investigation report and therefore we cannot know how the system needs to be changed. The Oireachtas Library and Research Service produced an excellent document dealing with regulatory failure in Ireland. I do not know whether it has been read into the record; I do not propose to read it today, but I may do so another time because it is an interesting document. We do not know why the system failed and whether it was the fault of the culture or of individuals.

Directors will still be appointed to the new Central Bank commission without Oireachtas scrutiny. They will be nominated at the behest of government. There are also shortcomings in respect of the powers the commission is given, including that of placing failed banks into managed administration.

Fine Gael has been asked several times over the past couple of years to don the so-called green jersey and to follow the Government blindly. On occasion we have supported the Government, but I must say, on reflection, that if we had known all the details before the introduction of the bank guarantee on that fateful day at the end of September 2008, we might not have been so willing to extend the guarantee to Anglo Irish Bank or Irish Nationwide. We were told at the time that the recapitalisation of Anglo Irish Bank would cost around €4 billion; now, it looks as though it will be at least €22 billion. Similarly, we were told the recapitalisation of Irish Nationwide would cost €1 billion; it has now become €2.7 billion.

When the Minister for Finance was questioned on the radio one morning, perhaps by Cathal Mac Coille on "Morning Ireland", about the estimated bad debt of Anglo Irish Bank, he responded to the effect that it was a dangerous line of questioning. Surely the Irish public are entitled to know the amount of bad debt carried by an institution it is about to bail out. If someone came along and asked me to act as guarantor for a bad debt, the first question I would ask is "What is the extent of the bad debt?". However, the Minister for Finance portrayed this line of questioning as being unpatriotic, implying that such pertinent and relevant questions were undermining the country's financial system.

The chief executive of AIB at the time used words to the effect that he would rather die than see recapitalisation of the bank. Everybody was wheeled out to tell us the fundamentals were strong and that stress testing had been carried out. We were told lie after lie, but we believed them because we wanted to. Most of us had a belief in the system. The people who believed in the system are now those who are most angry. A large section of Irish society never believed in the system and always felt we had a two or three-tier society. Others thought we had a good society, but they have been let down badly.

We were told the bank recapitalisation would allow credit to flow. However, I am not aware that this has occurred. People are in despair. Their lives have changed for the worse and they are wary. This gives rise to complete disillusionment with the whole system. They believe there is no accountability. It is now one and a half years since the financial crisis began but they do not see anybody paying for his or her sins. They do not even know what these sins are, because we have failed to date to establish this.

There was a protest outside Leinster House last night. I have no difficulty with peaceful protest, no matter how large or small, but I condemn the activities of a small number of protestors last night, and also some commentators who, in recent weeks, have almost incited such a protest by asking why Irish people have not protested more vigorously. One can make one's silent protest in the best place, which is the ballot box. Irish people will soon get their opportunity to protest because we live in a democracy. I call on those commentators to be responsible. Yes, we are all annoyed. Sometimes I would love to go over to the Government benches and tear them down, but that is not how it should be done. Change must be achieved through the ballot box.

Will we see a change of culture in the banking system? Deputy Doyle mentioned that most of the people who made mistakes are still in place. There is a misaligned interest. Those who work in the banking system do not work for the common good. They work for profit for their shareholders and bonuses for themselves. A major cultural change needs to take place within the banking system, which may require nationalisation; I do not know. Those who work in the system must realise that the banks work for the economy and the country, not for the shareholders. This misaligned interest is one of the fundamental reasons we have had these difficulties.

The public want to know what happened in the days leading up to the bank guarantee. Morgan Kelly wrote an interesting article in The Irish Times a few days afterwards. Was the official advice not to include Anglo Irish Bank and Irish Nationwide? Were telephone calls made directly to the Taoiseach and Minister for Finance which changed their view, thus lumping us with the €20 billion plus guarantee for those two institutions? What actually happened on that night? Will we ever know? Is there any paper trail? Will history tell us what happened? I do not like to enter the realm of speculation, but my view is that the advice was that Anglo Irish Bank should not have been included under the guarantee because it was not of systemic importance among our financial institutions.

The Acting Chairman is looking at me.

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