Shane Ross (Dublin South, Independent)

Like my colleagues, I am very reluctant to support this measure. If we go back to September 2008 we see that the initial decision - we still do not know exactly what happened behind closed doors - was dictated by a small group of bankers, probably four, who terrified the people inside the fortress of the Department of Finance on Merrion Street into giving way on this blanket guarantee. The Minister's statement today would suggest that little has changed since then. The views he sought in coming to a decision on an extension were from the Central Bank, the NTMA, the Department and so on. In other words, all the usual suspects are being reeled out in support of a decision to extend the guarantee.

The guarantee was apparently introduced in order to protect depositors. Now we are told that this extension is also necessary to protect depositors. However, the Minister indicated that last year, when the guarantee was already in place, there was a massive outflow of corporate deposits because the holders of those deposits had no confidence in depositing money in our banks, guarantee or no guarantee. That is because the credit rating of the sovereign, that is, the State, has tanked in recent years. We must ask whether there is any value to depositors in this, whether the State's guarantee is worth anything and why deposits were flowing out of the country despite the existence of the guarantee.

That guarantee was an opportunity for the last Government and this Government to take the banks by the scruff of the neck, control them and reform them. The last Administration did not do so and nor is its successor. If the Government is serious about being in control, why is it not insisting that finance be made available to small business? If the banks, with the exception of Bank of Ireland, are now State-controlled bodies, why is that lending not taking place? The Credit Review Office is nothing but a puppet organisation of the banks. Anybody who examines its composition, operations and findings will agree with that. It is operating as a type of subsidiary of the banks and making recommendations on a very small scale without assisting people in any way. It is a cover for the banks' failure to provide money to small businesses.

The second opportunity, of which neither Government took advantage, was to control the boards of the banks. That failure is clearly evident in the case of the two so-called pillar banks. Two weeks ago the chiefs of the two pillar bank boards, and a couple of others, had a meeting with members of the Government, including the Minister. Despite the fact that the State is supposedly in control of at least one of these institutions, they eyeballed the Government and would not agree to its request in regard to variable interest rates. This guarantee has given the banks everything. They have taken advantage of it and have spat in the eye of the Government. Why should we tolerate that type of behaviour from institutions which still consider themselves independent republics? They seem to be able to defy those who either have a majority shareholding or membership of the boards.

In that regard, one wonders what has happened to the public interest directors. Have they all gone native? They are certainly not acting in the interests of the public in conceding on issues like charges and remuneration. On every issue, they are conceding to what the banks dictate. In certain cases they have even given way to the desires of the boards of the banks against the wishes of the Government, particularly in regard to certain appointments.

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