Jim Daly (Cork South West, Fine Gael)

I welcome the motion which is timely. Any focus on this issue is a good day for democracy and for Ireland. I understand and appreciate the negative equity generation because I am a member of that generation along with many of my friends and colleagues. We all want to see the measures outlined in the Keane report brought to a head sooner rather than later in a bid to help these people. The Government has taken steps this week and even today with the establishment of an interdepartmental committee to oversee the work of the implementation body. I look forward to any resolutions from this committee.

The banks have been capitalised but the idea of any Member of the Oireachtas running a bank is a separate issue and one must be careful where to draw the line as regards governance, the Government and the banking sector. It may not be much comfort to the people in negative equity and struggling to pay their bills to know that the politicians were all of a sudden to dictate the interest rates for the banks and take an active role in the management of the banks. Interest rates are more complex. While the ECB is providing money at 1% and banks are charging 4% and 5%, the banks do not receive a full flow of money from the ECB and they rely for much of their funding on their deposit rate base which is a very competitive market. The situation is more complex than suggesting that the 1% should be matched because they cannot get their full funding from the ECB rate. An element of risk is built into many of the mortgages. Politicians sometimes get carried away as to dictating terms of reference for banks and how the interest rates should be set.

I support the efforts to provide credit finance for the small and medium business sector. In the past year, the banks have been restructured and recapitalised, a mortgage arrears resolution process is in place. The Irish Bankers Federation provided Members with an update today on the code of conduct on mortgage arrears. The personal insolvency Bill will be brought before the House by the end of April, in line with the troika commitment. Some of the failings of the Credit Review Office have been outlined but it is important to note that 50% of cases have been overturned and this decision has been honoured by the banks. The microfinance loan fund and the temporary partial credit guarantee scheme are examples of initiatives taken to address this very important issue.

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