Maureen O'Sullivan (Dublin Central, Independent)

Yesterday the Taoiseach used the words "dysfunction", "disconnection", "elitism" and "narcissism" about the church. Those words could equally be applied to our banking institutions. We cannot but be struck by the fact that at least apologies are coming from certain quarters in the church but there has been a lack of similar apologies from the banking authorities.

Once again, we are in a situation we should not be in or at least we should not be in it to the extent we are. While I accept outside influences did play a significant role, our banking crisis was essentially self-made through the greed of the bank authorities in that they allowed themselves become over-exposed to property. There was poor governance, appalling management or mismanagement, not to mention the cosy relationship between the banks and certain individuals. The Financial Regulator's role was extremely inadequate and the relevant people in authority in this House and in the Department of Finance were not up to the mark, regardless of whether they were misinformed, not informed or chose not to see. The solution chosen, namely, save the banks at all costs, led to the extensive blanket bank guarantee.

The point appears to be that if a systematic resolution framework had been in place we would not now be in the dire straits we are in, or at least not to that extent. It was borne out in both the Honohan and Nyberg reports that if a resulting mechanism had been in place, public losses would have been reduced.

I note the various purposes behind the Bill, including an effective and efficient resolution regime for failing or likely to fail credit institutions, and that the Exchequer will be protected. I accept we need to protect the interests of depositors, we need banks and we need financial stability. The Bill will give the Central Bank the necessary powers for these purposes but the Central Bank has not exactly covered itself in glory in the past. Banking authorities must be held accountable for their actions and the action is needed before a bank's balance sheet is insolvent.

I understand choices have to be made and balances struck between the protection of shareholders and the protection of the public and depositors' interests. However, the protection of shareholders should not be paramount.

With regard to the "special manager", in the opinion of the Central Bank, the person chosen will have "the requisite knowledge, expertise and experience of the financial services sector to be the special manager". This will have the effect of suspending the rights and powers of shareholders and members. The special manager has extensive powers to remove people in employment and those in positions, so those people who will be special managers, while they must have those considerable credentials, will also, I hope, be guided by values of honesty and truthfulness in carrying out their work.

I have been contacted by certain credit unions in my constituency. I understand a strategic review is being undertaken and that the report is overdue. It appears the credit union regulator is making decisions on credit union reform before the commission has completed its work. Credit unions have played a very important role in this country and have been the saviour of many individuals and families. There is a strong community base, particularly in disadvantaged areas, and they provided an alternative to the money lenders charging 140% interest and more, who also took social welfare books and pension books from vulnerable people who were desperate for money to pay bills or cover the cost of Christmas.

The credit unions also have a very strong voluntary element which must be acknowledged, as must the fact the members own the organisation. They are different from banks and I would not like to see the undermining of credit unions. I accept there is a need for good governance but the majority have worked well under the current governance and they play a very important role in providing credit.

It was interesting to read that from June 2009 to June 2010 those credits unions affiliated to the Irish League of Credit Unions provided €2.5 billion in loans to their members. If there are weaknesses, potential or real, they cannot be ignored, but I hope action will not be taken arbitrarily. While I know some credit unions are considering amalgamation, I hope the wishes of the credit unions can be taken into account. We need to have a balance between holding onto the traditional credit union ethos - community focused, member focused and in the best interest of the members - and not allow or facilitate a return to the money lenders, which I hear about at present in Dublin Central.

My final point concerns the need for regulation in all our institutions, including the church, the State and Departments, and the need for regulation regarding the big level operators and the big commercial interests. What appears to be happening is that families, those looking for mortgages and small businesses are being swamped by excessive regulation.

Such swamping is delaying real activity in the real economy, thereby leading to a stagnation in Irish society. Consequently, banks and lobbyists for big business are setting out to convince people that less regulation is required. I recently met representatives from small businesses who have been in business for more than 30 years, have paid all their bills to those who supply them and have paid their workers etc. However, they have been left high and dry by larger developers who had contracted them and who now are in foreign fields making more profit but are not paying their just debts in Ireland. I wonder whether the wrong people are being regulated excessively. It should be senior bankers and not the person on the street who did not trigger the problem in the first place.

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