James Reilly (Dublin North, Fine Gael) | Oireachtas source

At the outset, it is important to emphasise that the nationalised Anglo Irish Bank was deliberately set up in such a way as to keep it at arm's length from the State. As the late Brian Lenihan said at the time: "The bank will be managed on a commercial basis at arm's length from the Government, allowing the full potential of its business to be realised". The Minister for Finance was not required to be informed of details such as the Siteserv deal. That also applied to the Minister of the day, the late Brian Lenihan. As soon as concerns were raised in relation to Siteserv, however, the Minister and the Department took a series of actions on foot of them. The Minister revised the relationship framework with IBRC. As a result, he now has more oversight of IBRC activities, and rightly so. This Government's priority has been to reduce the cost to the taxpayer of the bailout of the banks and restore a functioning banking sector to serve the Irish economy.

IBRC, the wind-down vehicle for the former Anglo Irish Bank and Irish Nationwide Building Society, was liquidated as part of the deal to restructure the onerous promissory notes arrangement. The promissory notes deal in February 2013 was a key step in the stabilisation of the public finances and our clean exit from the bailout later that year. This Government reduced our borrowing requirement by €50 billion over the next decade, including €10 billion in cash savings. The disappearance of the former Anglo Irish Bank and former Irish Nationwide Building Society from our financial, political and social landscape were long overdue. Both institutions became synonymous at home and abroad with the reckless mismanagement of our banking system and wider economy. They became emblems of a culture of cronyism that undermined confidence in both our economy and our political system. They became a stain on our international reputation and a dent to our national pride.

Investigations by Mr. Peter Nyberg into the causes of our banking crisis revealed that both institutions had abandoned traditional checks and balances and risk management procedures in the pursuit of ever bigger short-term profits. Both institutions are also key to understanding the wider crisis because they were both seen as highly profitable institutions to which other Irish banks should aspire. As other banks tried to match the profitability of Anglo Irish Bank in particular, their behaviour gradually became similar. Accordingly, when the crisis broke, large losses were realised not only in Anglo Irish Bank and Irish Nationwide Building Society, but also in other banks. Such was the prominence of Anglo Irish Bank at the time that a Member of this House who is with us today, Deputy Shane Ross, suggested that the gentleman at the head of that institution should be made Governor of the Central Bank.

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