Peter Mathews (Dublin South, Independent) | Oireachtas source

I have been struck by the two previous contributions and would like to join them together. I ask the Taoiseach to arrange a plenary session of his Cabinet every 21 days to examine in a comprehensive manner the overall situation that obtains. Two weeks ago, Mr. Sebastian Barnes of the Fiscal Advisory Council, in describing Ireland's sovereign or national debt position as a proportion of national income or gross domestic product, stated we ranked third after Greece and Italy in the debt table. A very important omission was made from that observation. The two thirds of the equation that are missing are household debt and non-financial corporate debt, which is business or small and medium enterprise debt. These are the two elements of the debt problem that weigh most heavily on Ireland. If one takes all three elements of debt in the economy, one finds that Ireland's debt is the highest in the world. This is the problem and the reason the banks are caught in paralysis. Their lack of capital means they are not getting on with the job of writing things down, as Deputy Higgins correctly noted, and they also lack competent board direction and management to articulate the operation of so doing.

The banks have been drawing out the problem in a slow-motion resistance exercise as they seek to preserve the capital they received following two inadequate capital assessment processes. The first of these occurred in March 2010, at around the same time as payments were made to bondholders from money borrowed from the euro system, by the Central Bank in the case of Anglo Irish Bank and by the European Central Bank in the case of the two pillar banks because Allied Irish Banks and Bank of Ireland had acceptable assets or loan security. We must get real about this issue by assembling a robust combat team of negotiators to deal with the euro system and ensure the remaining banks, Allied Irish Banks and Bank of Ireland, can secure creditor buy-in from the euro system for the remaining capital requirements they need to press on with the job. The two pillar banks also need to have competent experienced managers who can negotiate with customers.

Professional insolvency practitioners are a new profession and while some of them have experience, others do not, even if they are technically qualified. To use the analogy of the health of the nation, when a pandemic breaks out doctors cannot fly over cities in helicopters and spray antibiotics or other medicines over the population but will instead engage in case-by-case assessments. This also holds true for loans. The lack of evidence that the banks have engaged in the restructuring or sorting out of loans means they do not meet the requirements for performing this task. In other words, they do not have capital, experienced management and competent direction. Their boards have been weirdly absent-----

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