Mattie McGrath (Tipperary South, Independent)

I am delighted to say a few words on this Bill. I welcome it and compliment the Minister on bringing it forward. However, I have some worries and reservations about it in terms of whether it goes far enough and will have teeth such that it will put manners on many of the reckless bankers. I am talking about senior bankers, not the ordinary bank staff or local management, to whom many speakers referred this evening and previously, in that they had a knowledge of people and had built up a relationship with them, whether regarding a mortgage to purchase a house or a loan for a small business. They had an important and respected role throughout the country, but the banks, like other institutions, fell into providing poor public performance.

In the main control was taken away from the local managers in banks who had the pulse of the people. They knew who had or had not the ability to repay and they also gave good counsel but then the Johnny-come-lately, whippersnapper whizz kids came along. They all worked on a commission basis and therefore wanted to lend as much money as possible as quickly as possible to as many people as possible, and there was no regulation. People were paid to regulate but they were either asleep at their desks or did not care. Light touch regulation was the order of the day, they dished out the money and ignored the rules and took the view that if they ignored the bubble that was getting bigger it would never burst. It was like a snowball rolling down a mountain that gets bigger as it goes along. They felt they could attract new people and adopted the attitude that if the odd one fell off, why worry about it. There was no regulation, no enforcement and no one was brought to account.

When the crisis hit, and there are many anecdotal stories involving the hard work done by the late Brian Lenihan, God rest him, and the work landed on his desk and that of the then Taoiseach, the view was taken that there were too many problems and that we had to be bailed out. The bankers pulled the wool over many people's eyes and while the then Minister and Taoiseach paid the price for that we must ask what advice did the many people who were in advisory positions, not only in the banks but also in government, with their so-called financial expertise, give? What was the reason for the rush? Why did the bailout have to happen? I know there were fears of contagion and so on but it was like the downfall of rain we had on Monday night. It was a sudden flood and the whole thing came crashing down with devastating consequences for business people, home owners, families and ordinary people.

Throughout all this the banks have not been upfront, honest or in any way compliant. They gave reports and commitments to the previous Minister for Finance and the Government side voted for it as well. The banks were supposed to give €3 billion per year to small business but it was a total con job, despite the commitments they gave. The plans had to be in by a certain date, I believe by 30 April, but when they came in they were rejected by the Minister and his officials. Further plans were submitted in a glossy presentation but they never followed through on them, and they never intended to follow through on them. They did not have a red cent to lend but the way they got away with pulling the wool over the eyes of Ministers, officials and those of us in this House is what sticks in the craw of the ordinary people who are being persecuted and pilloried. My colleague from south Tipperary highlighted anecdotal cases, one of which involved a person who wanted to buy a house to trade up in the market who was told to keep the one he had and buy another one. That is the way it was at the time. Young couples starting out in life with a family got more than they applied for. They were told to throw into their application the cost of a holiday, an SUV or whatever they were having themselves. There was no talk of saving for a rainy day or that things might change.

The banks have not been honest. Local management in the main were good people. There are still many good people in the banks but the control has been taken from them and they have been sidelined. My own bank manager in south Tipperary, who shall be nameless, who is my age or a little older told me that he knew what was happening but that he would have got rapped on the knuckles if he had said anything. He said he would have been told to step up to the plate or retire. That was not said in so many words but he understood that to be the case if he did not comply and allow the young turks who were under him to take control. He was sidelined to some extent. He was told this money had to be lent and that we had to catch up with Anglo Irish Bank and so on. There are many good people in the banks and they are all suffering now and are being pilloried. In some cases they are subject to unfair abuse thanks to a system that abandoned everybody. Greed took over and that is a sad situation.

I also welcome the provision on the protection of whistleblowers. It is vitally important that where an official in any job but particularly in the banking system is concerned about issues he or she will not be victimised, banished and that his or her promotion prospects will not suppressed.

I also welcome the provisions involving the reports of skilled persons. These provisions are based on a similar approach in the UK. We should examine best practice elsewhere and I hope that the Minister will. The ability of the Central Bank to collect information to ensure proper regulation must be water-tight. It is not only in Ireland that there were Central Bank problems, but it was very bad here and that is why we are in this perilous position.

With regard to the reports by skilled persons, if there are some other reports to be done the Bill also provides that the firms being reviewed must pay the costs of an independent report. This is not a bad development. While one will get any report one pays for, when there is a bit of sense, and there are checks and balances, this aspect will have to change.

This is progressive legislation. From where we stand or, should I say, from where we slipped or sleep-walked into this most awful position, any measure would be progressive. However, it must have teeth, it cannot be tokenism and it must be tough. It must bring back confidence among the public, the business community and the ordinary taxpayers that somebody is taking action. We are the ones charged with that. We are voted in here, the new Government and all of us, collectively, to try to restore some semblance of decency and responsibility in stepping up to the plate, being honest with the people and providing true reports rather than hiding from them.

Most credit unions of which I know kept the show on the road, were prudent in so far as they had to be and abided by the guidelines. There were many on their boards who were living in the community. They never lost touch.

We are told there are a few credit unions which could be in trouble but there is no list. We were constantly told we could not burn the Anglo Irish Bank bondholders and go hard on the bank because so many credit unions around the country had invested their depositors' savings in it. None of my colleagues, who asked the previous Minister and others, heard how many were involved. I believe it was only a smoke-screen.

The credit unions kept many families on the road, whether to cover expenses with back to school, for a holiday or for ordinary maintenance, damage to property or whatever in time of crisis, such as what happened in this city the other night. They are the only financial organisations with which people can have a relationship and from which they can get a loan fairly easily to keep the show on the road, to keep their families together, united and with a little pride and dignity, and to not be thrown to the moneylenders, whose activities must be examined given the racket in which they are involved.

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