Kieran O'Donnell (Limerick East, Fine Gael)

A third of Green Party Members have spoken in this debate and only a fraction of Fianna Fáil Deputies. That is symbolic of something.

The guarantee reminds me of the original guarantee scheme, which was introduced on 30 September 2008. We were not provided with the full facts then. I remember on the night that the question was asked why the Government was including dated subordinated debt lower tier 2 but there was no answer.

We still do not know the final cost of Anglo Irish Bank. Why was the cost not announced prior to the extension of the ELG scheme? The cost of borrowing on international markets is at a record high, a direct result of Government banking and fiscal policy. Once we get through the Minister for Finance's sweet talk, this is about a policy that has failed. Why was the Minister for Finance rushing in here on 30 September 2008 to introduce a guarantee scheme for a bank that was insolvent, even though he claimed the problem was one of liquidity? The share price for Anglo Irish Bank tumbled in March 2008 and the then CEO of the National Treasury Management Agency, Dr. Michael Somers, stated that he had major reservations about putting deposits into Anglo Irish Bank because of the sheer weight of property. Why did we reach a point where crisis management led to decisions being made on the hoof when they had such major ramifications for taxpayers?

In the two year period since, €24 billion has gone into Anglo Irish Bank, with €30 billion for all the banks. We still do not know the final figure for Anglo Irish Bank. Credit is still not being extended to small businesses and the financial sovereignty of the State is at risk because of Government policy.

NAMA is a disaster that has achieved the opposite of what it was set up to do. It was supposed to stabilise the property market and get credit flowing but it has done neither. The hair cuts in Anglo Irish Bank are so severe they show the inherent rot in the development loan books of all the banks. There was a two year window of opportunity under the bank guarantee and Fine Gael proposed that banks would deal with their loan books in that period and negotiate with their investors, ensuring the taxpayer would be the last person to pick up the tab. What happened? The taxpayer was the first to pick up the tab and no credit is flowing to the SME sector. That was a policy flaw. At every step along the way the Government has got it wrong. The guarantee had to be introduced, and we also had to guarantee deposits. No one disagrees with that. However, for the previous year it was clear there were major problems with Anglo Irish Bank that should have been dealt with and we should not have had a situation where, in effect, the Government guaranteed a bank that was insolvent. There are questions for the Minister for Finance to answer. What happened on the night of 29 September, when Bank of Ireland and AIB came to meet the Minister for Finance and the Taoiseach on foot of Anglo Irish Bank going to Bank of Ireland, looking for it to take it over because it was insolvent? The Minister needs to spell out precisely in the House what happened at that meeting.

I find it incredible that the Government was not aware that Anglo Irish Bank was insolvent. We are entitled to know. We have to get answers from the Minister for Finance. We need a bank resolution scheme put in place by 1 November and to commence immediately negotiations with the holders of subordinated bonds. We need a banking system which functions, but we also need a Government that knows what it is doing. The current Government does not know what it is doing in terms of banking and the economy.

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