Brian Lenihan Jnr (Dublin West, Fianna Fail)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

— welcoming the preliminary reports 'The Irish Banking Crisis - Regulatory and Financial Stability Policy 2003 – 2008' by the Governor of the Central Bank, and 'A Preliminary Report on The Sources of Ireland's Banking Crisis' by Messrs Klaus Regling and Max Watson, which were laid before both Houses on Wednesday, 9 June, 2010;

— commending the authors for their expert analysis and assessment of the issues referred to them and their conclusions;

— noting that both reports have drawn attention to a number of significant issues that require further investigation, including:

— bank practices, risk management and governance failures in the covered institutions;

— the performance of the Central Bank and Financial Regulator; and

— the role of fiscal policy and the macroeconomic management of the economy;

— noting that the Government initiated a review of property tax reliefs in 2004 and announced, in December, 2005, the termination of most schemes, subject to transitional arrangements;

— noting that the report by Messrs Klaus Regling and Max Watson distinguishes between issues that lend themselves to a formal process of investigation and issues that are, in general, less amenable to a legally-oriented process of investigation and may be more appropriate to policy review;

— agrees that, consistent with the framework for the investigation of the banking crisis announced by the Minister for Finance on 19 January, 2010, the findings and conclusions of both preliminary reports provide the basis for the preparation of terms of reference for a statutory commission of investigation;

— welcomes the publication by the Government of draft terms of reference which set out a comprehensive set of issues for further examination by a commission of investigation, having regard to the recommendations of both preliminary reports, as follows:

— in respect of the credit institutions that are covered institutions (pursuant to the Credit Institutions (Financial Support) Scheme 2008 (S.I. No. 411 of 2008)) the main causes of the serious failures, within each of those institutions, to implement and adhere to appropriate standards and controls (including checks and balances), in the context of corporate governance and prudent risk management policy and procedures, such as would have avoided the requirement for the provision of exceptional financial support from the State;

— in respect of Anglo Irish Bank Corporation and Irish Nationwide Building Society, the main causes for the adoption, during the period 1 January, 2003 to 28 September, 2008, by their boards of business models and strategies, and the implementation by their senior management of business and lending practices which resulted in those institutions experiencing severe financial distress;

— whether the external auditors of each of the covered institutions commented in their audit reports or other communications to the institutions on the above mentioned failures referred to or the business models and strategies and business and the above mentioned lending practices referred to;

— the main causes for the failures in the performance of the statutory roles and responsibilities of the Central Bank and Financial Services Authority of Ireland (CBFSAI) in respect of the regulation and supervision of the covered institutions and the maintenance of financial stability, in particular in relation to the supervision and oversight of corporate governance and risk management policies and practices in all of the covered institutions and the relevance in this regard of any advices or directions given by the Department of Finance to the CBFSAI in relation to its supervisory role;

— welcomes the intention that the proposed commission of investigation complete its report into these matters no later than six months from the date of its establishment;

— proposes to request the Oireachtas Joint Committee on Finance and the Public Service for its views on the following key policy lessons in relation to macroeconomic management set out in the report by Messrs Klaus Regling and Max Watson:

— the need to mitigate through fiscal and prudential policies any mismatch between monetary conditions and the national business cycle;

— the appropriate management and surveillance of imbalances and risks that can build up in both the private and the public sectors of national economies in the Eurozone including 'external' imbalances vis-À-vis other euro area members, and the way those imbalances are funded;

— the design of fiscal policies so as to build in sufficient allowances for temporary revenues so as to avoid erosion of the tax base and, in this context, the case for independent institutional sources for economic and fiscal projections and for national fiscal rules in due course;

— welcomes the intention of the Minister for Finance to make himself available to the committee to answer any questions it might have, particularly in relation to the steps taken to manage the financial crisis up to and including the provision of guarantees to financial institutions at the end of September 2008, and to make available to the committee documents which were prepared in the crisis management period.

I agree with Deputy Connaughton's last sentence and I will make the information in my Department about what happened on that evening available. I would be delighted to go before an Oireachtas committee to answer questions Deputy Connaughton or other committee members have. I do not wish to subject myself or the House to a tribunal that may last 14 or 15 years as these matters are examined.

See this speech in context