Joan Burton (Dublin West, Labour)

I will speak to the amendment on behalf of the Labour Party. One of the risks with any change in the Central Bank structure is that while we get over the mistakes made and which led to the crash, on the other side we could create corresponding mistakes because of a lack of balance in the legislation. The critical change element in the legislation is that the focus has moved almost entirely and understandably to the prudential regulation of banks as institutions. That means policy in the Central Bank and the new regulator will be geared towards trying to make banks profitable again, which will inevitably come at a cost to the consumer.

As I have stated in previous discussions on the Bill, the Department of Finance does not appear to understand that consumers of banking services are not just people like me, individual consumers and families, because in this country they also include small and medium businesses, which are the backbone of employment around the country. Consumer interests will not be protected and there will be no barrier between companies and the banks with rip-off fees or charges for financial products. The previous banking model heavily incentivised bank managers and staff to turn into selling agents of bank products on commissions and bonus payments. There is nothing in this legislation that will in any way temper the banks in future from continuing with this.

The Minister is suggesting that legislation in the autumn may change this but the banks will have a field day in upping their charges to whatever level they feel is sustainable in order to get their profits back. That is the approach of the Department of Finance. We should remember that we want banks to work but we do not want banks making excessive profits and ripping off consumers, which is why it is very important for serious attention to be paid in the legislation to consumers who are individual customers and small and medium enterprises.

This is not a worry for the multinationals in Ireland because, by and large, they are not dependent on local Irish banks in Ireland for their main financing structure. They may use local bank services or the Irish Financial Services Centre for treasury operations but in the main they are not stuck in the Irish market as are Irish small and medium companies and indigenous companies. In the Minister's eagerness to correct the mistakes of the past he is sleepwalking into allowing consumers, including businesses, to be completely ripped off without any protection against excessive bank charges.

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