Pat Rabbitte (Dublin South West, Labour)

I support the amendment. As Deputy Burton stated, the Labour Party is in favour of the introduction of bank resolution legislation. Such legislation was not in place in 2008. Not many Members knew much about bank resolution regimes at that time. However, we have all learned a little about them since. Having waited for a bank resolution Bill since 2008, we have suddenly been presented with one on the day before the House is due to adjourn for the Christmas recess. There is no rebutting the argument advanced by Deputy Burton that this is no way to make law. We have been presented with a complex item of legislation which runs to some 76 sections and we are expected to respond to it on the hoof.

I do not believe the Bill before the House constitutes bank resolution legislation. It certainly does not reflect the bank resolution legislation that has been put in place in other jurisdictions. Rather, it is a temporary measure which is designed to empower the Minister to do certain things, some of which may be in urgent need of being done. For example, it is obvious that AIB plc would be in danger of losing its banking licence after 31 December next if the Minister is not empowered to come to its rescue. A press release from AIB appeared on the Reuters website last night and in it reference is made to the Minister publishing the Bill. The press release in question states "the Minister has indicated the legislation, if passed, will be available to effect, in part, an injection of capital into AIB prior to year end". In other words, what is being stated is that AIB would not be in compliance with the new capital adequacy ratios established by the Financial Regulator by the end of the year. If the bank is to comply with the new capital requirements, the Minister must be in a position to do what he proposes to do.

Under normal circumstances, the provision of a bank resolution regime would be entrusted to the Financial Regulator or to the Central Bank. In the legislation before the House, the Minister proposes to take over that function. He is arrogating unto himself the prudential function relating to the special resolution scheme envisaged in the Bill. That is most unusual. Following the collapse of Northern Rock, the UK authorities introduced temporary legislation to cover a period of six or nine months in which they could get their act together and decide what would be required in respect of a special resolution regime. They then introduced what became the Banking Act 2009.

I would be interested in hearing the Minister's views on why, in the period since 29 September 2008, he has not sought to establish a special resolution regime. At present, his actions appear to be driven by two factors. The first of these is the urgency with regard to the position of AIB and the second is the IMF-EU-ECB agreement, which places certain impositions on the Minister in the context of his ability to intervene, restructure and make changes within the banks, to reallocate sections of one bank to a safer home, etc.

Deputy Burton sought to make the point that the Labour Party is in favour of the introduction of bank resolution legislation. However, it is most unfair to place Members in a position where the legislation has been thrust upon them 24 hours before the House rises for the Christmas recess and then expect them to make a considered response in respect of it. I am not opposed to the Minister taking upon himself powers that are proportionate to the job that must be done. However, any reading of the Bill suggests that it will empower the Minister, without reference to the Houses, to make orders that are contrary to legislation enacted by the Oireachtas and to the provisions of particular laws. This extraordinary power is contained in section 53.

It is important that the interpretation section of the Bill should seek to constrain, in the fashion envisaged in the amendment, the powers of the Minister. The Bill contains a sunset clause which appears to support the view the Labour Party is expressing, namely, that this is not bank resolution legislation. Rather, the Bill is a temporary measure to which certain limited, designated objectives attach. The Minister appeared to imply that, as a result of a requirement contained in the deal with the EU and the IMF, a more comprehensive item of bank resolution legislation will be forthcoming in the spring. Everyone would welcome the introduction of such legislation. In the meantime, however, we must respond to the interim measure before the House. I submit the amendment tabled by Deputy Burton is desirable and the Minister still would have powers that are proportionate to do the job he must do.

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