Heather Humphreys (Cavan-Monaghan, Fine Gael)

On the occasion of my maiden speech, I wish to put on record not just formally but sincerely that I am deeply conscious of the honour that has been bestowed on me by the people of Cavan and Monaghan. I thank my family and all the people who helped me on a voluntary basis during my election campaign but, most of all, I thank the people who voted for me. I am especially conscious of the trust that has been placed in me and I pledge to work hard and honestly to represent my constituents. With this honour comes duties to the people who have sent me to the House as their representative. In carrying out those duties I look forward to working with my fellow Deputies from the constituency and with members of the Government.

I pay tribute to former Deputy, Seymour Crawford, for his loyal service to the people of my constituency in the House for more than 18 years. In his maiden speech on 15 December 1992, he spoke of the various economic and infrastructural needs of the constituency. He referred to the needs of the agricultural community and the potential that its exports had for our economic regeneration, as well as the need for Ireland to maintain competitive advantage in international trade and to the necessity to provide funding for rural development initiatives, especially for roads, something that is still vital for our two counties. He spoke of the need for cross-Border interaction and for INTERREG funding for the Border region generally and of the severe economic hardships and deprivation the region was suffering.

I acknowledge that, on a number of these fronts, much progress has been made. The peace process, in which Deputy Crawford played a significant role through the British-Irish Parliamentary Body, coupled with a period of economic gain, changed the dynamic in many ways. It enabled people to take up initiatives within the economic sphere, which were unthinkable previously.

I would like to record the strong desire of my constituents for equality and fair play in our quest to rebuild our broken economy. As we strive to deal with the awful situation that faces us, to rebuild trust in politics and in the workings of this House and as we work to give people the hope they deserve, let us not forget the wider picture. We do not live in an economy where people are just economic tools; we live in a society, a community in which each of us has a responsibility to each other.

I very much welcome the opportunity to contribute to the debate on this legislation, which is hugely significant in the context of the entire banking system. We are all well aware of the fact that our banking system and regulatory authorities failed us completely but we need to acknowledge the role of others in this catastrophe. What was the role of auditors in the banking collapse? After all, they signed off on the accounts presented to the public and some of the same auditing firms continue to provide services to the State. What was the role of commentators and analysts in the daily and Sunday newspapers who told people to buy property and invest in shares? Those who said "Stop" were made to feel like they were fools who were missing out on a great opportunity. This was the crock of gold that we were all told we would have. We bought houses not only to live in but to retire on. We were all encouraged to buy into a greedy society that measured success on the accumulation of assets, which, in some cases, are now worthless.

In respect of our banking system, some commentators may say this Bill can be seen as a classic case of locking the stable door after the horse has bolted. However, if one does not learn from one's mistakes, one is destined to repeat them. In that respect, we are all fully aware of the mistakes that were made in the past by our credit institutions and the aim of this Bill is to ensure they are not repeated.

There have been three comprehensive reports on the banking crisis. The general theme of all three reports was that while global factors played a part, Ireland's banking crisis was essentially homemade. Our banks were over exposed, poorly governed and had inadequate risk management. Our regulatory controls did not work for us and these weaknesses subsequently proved disastrous for our banking sector and the wider economy. Essentially our banks were allowed to chase after market share in a reckless manner, while the necessary structures were not in place to withstand the enormous problems which came their way. As a result, it was the Irish taxpayer who had to come to the rescue when difficulties arose.

If enacted, this Bill will establish a variety of means for protecting our credit institutions should we encounter institutions which are failing or likely to fail in the future. One of the key points is the establishment of a resolution fund which will provide funding for the resolution of credit institutions. Once the Credit Institutions (Stabilisation) Act 2010 expires, all banks and building societies, along with 409 registered credit unions, will be required to contribute to the fund, with non-payment amounting to an offence. In the case of credit unions, cognisance should be had to the fact that no State aid has been given to them and their contributions should be commensurate with the individual risk profile.

This Bill gives the Central Bank very sharp teeth, with extensive powers that need to be used effectively and efficiently while working to clear objectives. There need to be clear lines of accountability and I urge the Minister to ensure that the Central Bank is held accountable and responsible for its actions, and where necessary it must justify why a certain course of action was taken or indeed not taken. The Central Bank's officials must have a clear understanding of the outcomes of the decisions they make, and we do not want to find ourselves in the same situation as was the case in September 2009 when panic ensued.

In view of the extensive powers being given to the Central Bank, the Minister should ensure objectives such as market confidence, public awareness, the protection of consumers and the reduction of financial crime are put in place. In discharging their functions, the Central Bank officials must be mindful that a burden or restriction imposed on a financial institution should be proportionate to the benefits, and consideration should be given to the expected result from the imposition of that burden or restriction. They need to take account of the international character of financial services and markets, and the desirability of maintaining the competitive position of Ireland, and the need to minimise the adverse effects on competition in the industry that may arise from such actions. They need also to be careful that innovation and market growth is not stymied by their approach.

The Central Bank and especially the regulator of credit unions should be looking at the success of the co-operative and ethical credit union model, which has helped so many people and communities in this country, and ensure it is not regulated out of existence. Sweeping regulation across the financial sector needs to be considered carefully, in particular the effect it will have on the credit union sector. The Minister should ensure that the "one cap fits all" approach is not pursued in the interest of easier oversight.

In my own experience, the success of the credit union movement arises from the fact that it is cemented in the community for the community, and local knowledge, coupled with the trust and loyalty that credit unions enjoy, is one of their great assets which cannot be measured in the balance sheet or taken into account in stress testing exercises. The strong ethical values of credit unions will serve them well in these difficult times and more than ever, we need to afford our credit unions a degree of flexibility to continue to provide much needed credit to local businesses. The continued flow of credit is absolutely essential to the recovery of our economy and what better vehicle to use at a local level, whether for individuals or small business, than the credit unions.

The credit union review commission has been set up by the Department of Finance and I want to welcome the review, which is due for final report in March 2012. In the interim, we need to be careful of how the credit union sector is managed in terms of regulation and resources. In carrying out his regulatory duties, the regulator must not make any attempt to micro-manage the sector. We need to take cognisance of the continuing unique role of credit unions in society and in all of our communities, particularly in these difficult economic times. We must make sure that the baby is not thrown out with the bath water. In our attempts to eliminate credit union risk, we could end up getting rid of credit unions.

I welcome the Bill, but with increased powers come increased responsibilities and accountability. This should always be the case.

It is important to remember we do not just live in an economy - people are not just economic tools - we live in a society and in a community in which each of us has a responsibility for each other. Go raibh maith agat.

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