Enda Kenny (Mayo, Fine Gael)

It is more than 18 months since the Fine Gael Party put forward in the House an alternative to the banking problem in the country. We made a particular pitch that powers be given to the Central Bank to deal with what we called a special bank resolution system, which would allow for the orderly wind down of failed banks and spread the cost of such failures more evenly between the taxpayer, professional bank investors and creditors. The Government turned that down.

Yesterday, I listened to the Financial Regulator, Mr. Elderfield, and he confirmed that such powers as would be contained in a special bank resolution system would have been of assistance to Irish authorities in dealing with the banking crisis and he said they would be necessary for imposing losses on subordinated bondholders in Anglo Irish Bank. Last week, during the debate on the extension of the banking guarantee scheme, Deputy Noonan, on behalf of Fine Gael, offered the Government parties our support for the extension of a limited guarantee on condition that they would bring forward legislation by 1 November but, as always and as usual, they turned that down. Have the Government parties reflected on the comments of the Financial Regulator yesterday? Have they brought urgency to introducing such legislation? When might such legislation be brought forward?

On the same subject, I listened to the Minister for Arts, Sport and Tourism the other day. She made the point that the Government was legally prevented from negotiating with bondholders. If that is the case, which legislation was the Minister referring to that prevents the Government from dealing with this?

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