Billy Kelleher (Cork North Central, Fianna Fail)

I welcome the opportunity to speak to the motion. As the Taoiseach stated in another debate, history is continually being rewritten and a great deal of revisionism is taking place. While it is unusual to have history written as the relevant events are unfolding, we should not be in the least surprised by anything that occurs in this House.

If people wish to speak on this issue, they should read the relevant reports and listen to what the reports' authors have to say when they appear before committees of the House. Professor Honohan, Mr. Regling and Mr. Watson have been at pains to point out that to point the finger of blame for the banking crisis at one agency, authority or individual or at Government fiscal policy is to engage in simplistic assessment.

I would like to address a number of issues but unfortunately I do not have sufficient time to do so. It is important to note, however, when analysing Professor Honohan's report, that the Opposition's contention that we should not have guaranteed Anglo Irish Bank because it was not of systemic importance is factually incorrect. In Chapter 8.43, Professor Honohan states:

There can be little doubt that a disorderly failure of Anglo would, in the absence of any other protective action, have had a devastating effect on the remainder of the Irish banks. Given the other banks' reliance from day-to-day and week-to-week on the willingness of depositors and other lenders not to withdraw their funds, and the certainty that those lenders would infer from the failure of Anglo that all the other Irish banks might be in a comparable situation, in all likelihood the main banks would have run out of cash within days. They did not have unused collateral eligible for borrowing at the ECB's facilities in sufficient amounts to meet a run on the scale which would have ensued. Absent Government support or ELA they would have to close their doors also, unable to pay out on cheques presented and other payments instructions. Closure of all, or a large part, of the banking system would have entailed a catastrophic immediate and sustained economy-wide disruption involving very significant, albeit extremely difficult to quantify, social costs, reflecting in particular the fundamental function of the payments system in a modern economy.

This statement demonstrates that Anglo Irish Bank was of systemic importance and the decisions made on the bank guarantee were crucial in maintaining the integrity of our banking system and allowing the difficulties that were becoming evident in Anglo Irish Bank to be addressed in an orderly manner. It is equally important to note that there would have been systemic failure in the two major banks in a matter of days if the bank guarantee of September 2008 had not been introduced.

The Regling and Watson reports and the Honohan report outline the many reasons for the pro-cyclical fiscal policy and inflationary pressures building in the economy in the context of credit flows and the development of the property bubble. Equally people should be honest in this House. On trawling the Dáil records I have yet to find anybody who said the Government should have been spending less money on the needs of our people at that time in the area of health, education and social welfare and across the infrastructural development of the country.

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