Brian Lenihan Jnr (Dublin West, Fianna Fail)

I did not realise I had taken up so much time. I will conclude by referring to the Minister's comments on the new banking stand-alone unit accountable to him through the Department of Finance. I can appreciate what he is attempting to do. At the time of the guarantee, responsibility for execution and formulation of policy rested exclusively with the Department. From 1 January 2010, elements of the execution of policy were devolved to the National Treasury Management Agency, NTMA. I found this a good arrangement because the NTMA generally has more experience than officers of the Department in dealing with and handling financial transactions. The Minister will need to consider carefully the remuneration of the staff he proposes to assign to the banking unit and their precise legal relationship with him and the Department. As I understand his comments this afternoon, the staff will begin in the position of being directly part of the Department but, in time, may have a somewhat independent existence.

It is a matter of difficulty - I am sure the Minister has encountered this difficulty already - that, in terms of banking policy, a Minister must make decisions on advice from his or her officials with the assistance of the NTMA, which is under the Minister's direct direction, and having regard to views expressed by the Central Bank and the regulator. A wide range of entities are involved and their priorities are not always the same. For example, the priority of the Central Bank is financial stability, that of the regulator is prudential regulation, that of the NTMA tends to be to make money and that of the Department of Finance tends to be to reconcile all of these different points of view. I have a word of caution for the Minister - if there is a new banking unit, he should make sure it is clear where this particular brick fits in the wall so that he can be in a position to make whatever decisions are the right ones in the public interest.

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