Beverley Flynn (Mayo, Fianna Fail)

Despite what has been claimed in the House tonight, the Government is committed to resolving the banking crisis and bringing about financial stability at the cheapest cost to the taxpayer. Neither is it responsible for the reckless lending that took place in the country's financial institutions. However, it is committed to resolving the problems that have arisen from reckless lending by our bankers and which have had a devastating effect on the economy.

The 2008 credit institutions scheme gave a blanket guarantee for Irish banking institutions. It was an important measure without which the banks would have faced certain collapse with devastating consequences for the economy. While the measure was supported by Fine Gael at the time, the Labour Party decided not to. Had its policy seen the light of the day, the consequences for Ireland would have been drastic and affected not just Anglo Irish Bank but the other Irish banks because of how they are all interconnected. The State would not have had access to international money markets to fund its day-to-day activities with dreadful consequences for society.

There has been much misquoting of the Governor of the Central Bank tonight. In his recent report on the banking guarantee, he stated an extensive guarantee needed to be put in place; otherwise our banks would have run out of money in days and have been forced to close their doors. He went on to state, "Closure of all, or a large part, of the banking system would have entailed a catastrophic immediate and sustained economy-wide disruption". This from the Governor praised by all sides of the House.

The eligible liabilities guarantee scheme was introduced in December 2009 to provide access to longer term funding for our financial institutions. The scheme allows them to issue both guaranteed and non-guaranteed liabilities which will help reduce their reliance on State support, a development all Members would like to see when markets improve.

I support the extension of the scheme, as proposed by the Minister for Finance, recommended by the Governor of the Central Bank and approved of by the European Commission.

See this speech in context