Brian Lenihan Jnr (Dublin West, Fianna Fail)

Let us not hear any more about transformational change from Deputy Bruton and let us hear no more about political cultural change. Political cultural change is not happening in the main Opposition party in respect of the handling of this issue. Last Friday, at the meeting attended by Herr Regling and Mr. Watson, Deputy Bruton pushed very hard to have these experts join a witch-hunt against the Taoiseach. They refused, with Herr Regling saying "it would be quite easy to blame persons or institutions" but that this would be to miss the point and would be far "too simple". The simple soundbite is the essence of populist politics and that is what we have got and what we will continue to get from Fine Gael whatever the new or continued dispensation may be later in the week.

The authors of these reports and the citizens of the country deserve more. Last February I set out a comprehensive framework of investigation for these matters. I said that a comprehensive understanding of the events that took place in the banking sector in this country was an essential component of recovery. We have a duty as Members of the Oireachtas to ensure not only that the origins of the crisis are understood but that lessons are learned and that the international and domestic confidence in our banking system is restored so that our economy can return to growth.

At the first stage of the process of investigation, these two reports provide an authoritative examination of the crisis in the banking sector in Ireland. They also provide a solid basis for further investigation of a number of significant issues. The reports will be considered by the Joint Committee on Finance and the Public Service with regard to the terms of reference. The committee has had two separate and lengthy engagements with the authors and I thank the members of the committee for engaging.

It is important to set out the issues that, in the Government's view, require further investigation and how we propose to address these issues. I am more than willing to listen to different views expressed so we can try to come to a practical agreement on this matter. The Government has given extensive consideration to the two reports over several meetings. This has given rise to some criticism from the Opposition, who seem to think we should join them in the political football game they are playing with the reports. The Government proposes that the Oireachtas should begin to give serious consideration to the reports and the next steps leading to the establishment of a commission of investigation.

The report of Herr Regling and Mr. Watson examines the recent crisis in Ireland's banking system as a whole to inform the future management and regulation of the sector. It analyses how different factors - external and domestic, macro economic and structural - interacted to cause the banking crisis in Ireland. The authors advised the Oireachtas Joint Committee on Finance and the Public Service that the factors involved were multiple and complex. No single factor lay at the heart of the crisis. This is clear from the report's key conclusions. They point out that the crisis was influenced in crucial ways by global events but that our difficulties arose from a property bubble, compounded by exceptional concentration of lending for property, and specifically for commercial property, to a limited number of key developers. The report says bank practices and governance failings exacerbated Ireland's credit and property boom, leaving the economy vulnerable to a deep crisis, and depleted its fiscal and banking buffers when the crisis struck. Lending trends in the Irish banking sector were analysed and the pace of expansion and the rise in asset and funding risks should have rung alarm bells in banks on the management side and on their boards and in the supervisory structures.

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