Jonathan O'Brien (Cork North Central, Sinn Fein) | Oireachtas source

We also welcome the Bill and will facilitate its passage through the House today. We recognise that the Government has introduced the legislation in response to a request from the Chairman of the committee, and has done so pretty quickly. As the Minister of State outlined, it was debated in the Seanad last week and is in this Chamber today. I think all Stages are being taken today, which is important. The Bill will assist the banking inquiry in its efforts to get to the heart of what happened in terms of the guarantee, which is important. It will also help to speed up the process of collecting the information and evidence - a process which is already under pressure due to the delay in establishing the banking inquiry. The Minister of State would probably disagree but should the Government fall in the morning or next week, then the banking inquiry will also collapse, so time is of the essence here and that is why we welcome the legislation.

The Minister of State pointed out that the bank inquiry will examine the reasons Ireland experienced a banking crisis that resulted in great upheaval for the Irish people. That is important because not only will the banking inquiry look at what happened, but it will also ask why it happened. That is important because it is not as straightforward as sometimes the narrative portrays. For a start, we seem to be in a situation where why it happened is assumed and is almost obvious. On the face of it, the question of why the bank guarantee was given appears to be one of liquidity but when one examines it more closely, it is a case of solvency. We all know the consequences of the guarantee. As a result of the guarantee, the Irish people are liable for the losses in Anglo Irish Bank and Irish Nationwide Building Society. The explanation goes that it was a desperate mistake to have made, a fatal blow to the health of the nation, but the apologists would ask what could we do for the decision was taken with no malice intended.

The situation was compounded by the actions of the European Central Bank, ECB, which, after September 2008, issued billions of euro to the Irish banking system via the purchase of Irish bank bonds, the credit worthiness of which was underwritten by the State guarantee.

In November 2010, the ECB, along with other members of the troika, effectively moved into and took over the Department of Finance so as to ensure that no bondholder, including themselves, was left behind. In the words of the apologists, it was all down to a desperate mistake. They tell us there was nothing that could have been done, that that is just the way it was and that we need to move on and get on with it. The narrative, ultimately, is that decent people made desperate decisions in dire circumstances and that there was no other way out of it. In that regard, one of the jobs of the committee is to establish the "why".

It is important to stress that the guarantee decision cannot be waved away as a case of political naivety on the part of the previous Government. It is possible to say that with some confidence because of the questions asked to date at the banking inquiry, including those by my own colleague, Deputy Pearse Doherty, and because of some of the answers given by the witnesses who have appeared before the inquiry. We know that from at least September 2007, with the Northern Rock crisis, the authorities and the Government parties were discussing financial crisis management tactics. That means that for a full year before the bank guarantee was approved by the Cabinet there had been conversations at the highest level within Government about what to do if or when an Irish bank was threatened with illiquidity or insolvency issues.

We also know from evidence given by Professor Ed Kane of Boston College that when we talk about a bank being too big to fail, what we are really talking about is a bank too powerful to fail. In his opening statement to the inquiry Professor Kane said that a government's willingness to rescue a certain institution lies in the links between that institution and the political elites. That is important because it goes to the heart of the matter.

When we consider what happened in terms of Ireland and the bank guarantee, the one element missing from the official report so far, and the one that has been down-played by the previous Government and this Government, is the links between finance and politics within the State. The other element is property speculation, in particular, commercial property speculation, in terms of the bad loans that made up the bulk of the debt transferred from the banks on to the Irish public via the National Asset Management Agency, NAMA. That is where the "why" becomes relevant once again. Once we start to examine the bank guarantee in the context of the relationships between property, finance and the State, the "why" of the bank guarantee takes on a different colour from that of the asleep at the wheel narrative that is so often put forward by the previous Government.

We know from evidence given to the Committee of Public Accounts by Brendan McDonagh of NAMA that 90 borrowers taken on board by the agency had collective debts of €62 billion. In terms of the Anglo Irish Bank loan book, just 20 borrowers accounted for over half of its value, and the value of loans to the top 25 customers of Irish Nationwide represented 51% of that institution's commercial book.

We know where the power lies within this State. It is within the nexus of finance, property and political influence. It is to the credit of the banking inquiry committee that this nexus is at the core of the operation of the inquiry. For that reason we welcome this Bill and will assist its passage through the House today because the task of the committee is of great public importance. People have a right to know what happened because they continue to suffer as a result of the bank guarantee, with that onerous debt being placed on their shoulders. Not only should we know what happened, but why it happened.

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