Seán Fleming (Laois-Offaly, Fianna Fail)

There was a conspiracy at European level not to spell out what would be needed to back up the currency. We had the front of house part of the currency without the architecture at the back, the things required to manage a currency and banking and financial institutions which were lending and borrowing under a new currency arrangement. That was not put in place - we are now beginning to put such a mechanism in place - and it led to ambiguity about whether a bank in the eurozone should not be allowed to fail. I am of the simple view that all businesses, including banks, should be allowed to fail and I regret that the Government has a strong policy to allow for two pillar banks. These will be sacred cows and no matter how bad they are and what mistakes they make, they will be too big to fail because each of them will have an amount almost bigger than the GNP of the State.

Upon entering the eurozone, foreign banks opened here. I am particularly scathing of Bank of Scotland which offered 100% mortgages and claimed to be the Ryanair of mortgages and lending; it was anything but. Previously, a person had to borrow or have a deposit of €50,000, but Bank of Scotland Ireland put pressure on the domestic banks to follow suit or lose business. That is where the herd instinct came into play, with people following the leader like sheep following the one going through the gap. To an extent, the report captures the mood in Ireland in that period. It is wholly unsatisfactory to many here because they wanted to see some people crucified in the report and they are unhappy that has not happened.

Moving to the Government's response, the report criticises the Central Bank for not having a proper handle on the issue. The previous Government appointed a new Governor of the Central Bank from outside the system to ensure the internal old boys' network did not have control. The report highlights the faults in the financial regulatory system, states it was not up to the job and points to the actions of the previous Government which brought in Mr. Elderfield from outside who would also not be part of the old boys' club.

The third leg of officialdom that has been criticised is the Department of Finance. The Secretary General at the Department of the Taoiseach is advertising three new Secretary General posts, including the person who will oversee all Government expenditure of up to €50 billion per annum. The only people being invited to consider the job are members of the old boys' club within the public service. I encourage the new Government to insist on that process being set aside because it is not in keeping with the current position in Irish society and the bringing in of outsiders into such posts. We should not continue to promote civil servants who have been in positions during the years because of time served. There is a strong case for that process to be set aside. I look forward to the Government following the good example set on these matters and moving on.

The proposal to hold a referendum has been the main response of the Minister for Finance. It is, however, important to tell the people when we are holding a referendum to give more investigative powers to Oireachtas committees that no Oireachtas committee can achieve a conviction. In Ireland we separate the Judiciary from the Legislature. The only institutions which can impose criminal sanctions and send people to jail are the courts. The only report I want to see after all of this is on the trials I hope to see resulting from the work of the Director of Corporate Enforcement and the Director of Public Prosecutions, whereby those who have done wrong will be brought before the courts.

I wish to put down a marker to the Director of Public Prosecutions and others involved that no one should be given immunity from prosecution in respect of any of the cases which may arise. There is always a tendency to give immunity to a certain person to provide evidence to convict another individual. If we pursue such an approach, it will help to undermine the system. Not providing immunity might make it far more difficult to obtain successful prosecutions. However, the public would be outraged if sweetheart deals were concluded with anyone who was implicated in any of the activities which caused such distress, harm and damage to the economy and the welfare of so many citizens.

A large number of the people's mortgages are now greater than the value of their houses and some of them will be obliged to pay them back over 40 years. The older Members of the House would have obtained either 20 or 25 year mortgages. However, there are those who have 30 and 40 year mortgages. We are heading in the same direction as Japan, with mortgages that span almost two generations, which is unfair, at the low interest rate. These are matters which should have been monitored across Europe. When the euro currency was established, those at European level who had experience of dealing with currencies and what happened in the aftermath of the Second World War should perhaps, given that they were better placed that those in the Central Bank, have taken a more direct, hands-on approach to managing and licensing Irish banks.

The new Irish banks are going to be too large for an Irish regulator to manage. There is a case for banks to be managed on a Europe-wide basis rather than in the countries in which their head offices are located. I do not believe it is possible to have a system whereby 27 different regulators will have responsibility for regulating the affairs of banks in the 27 member states, particularly when banks can operate across borders. I also do not believe it is possible for banks to operate across the 27 member states and then be regulated by someone in a particular jurisdiction where a certain standard applies.

A common standard should be adopted across Europe. That would be a good development and give confidence in respect of the banking system. In addition, banks which are not performing would be allowed, like any other business, to fail. There is no reason that banks should be granted indefinite guarantees.

I will support any proposal put forward on holding a referendum in respect of detailed inquiries being carried out by the Oireachtas. I would be far more concerned, however, with seeing people being brought before the courts rather than being compelled to come before the Houses. The people want those responsible for our woes to be brought before the courts.

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