Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I did not hear a single Opposition Deputy make reference to the Insolvency Service of Ireland or speak of the difference it makes to citizens, as highlighted earlier this week. That service plays an important role in ensuring that citizens can stay in their homes while dealing with their financial difficulties. I did not hear a single Opposition Deputy refer to the insolvency legislation which has played such an important role in reducing the level of distressed debt in our country. No one made the point that the level of repossessions that we have seen in our country to date has, thankfully, been below that forecast by many when our country was dealing with enormous levels of financial difficulty. No reference was made by any Deputy to the supports that are in place, the progress that has been made or the various laws that were enacted by this and the previous Government that have played a role in offering support to citizens at times of great difficulty. Of course I know, because I represent such citizens too, that those supports do not always work for people. I know that despite the supports that I have acknowledged - but that no one else acknowledged - there are citizens in all of our constituencies for whom they are not enough. They still find themselves in difficulty with their banks.

Let us deal with the legislation that is being proposed here.

The legislation proposed by Deputy Pearse Doherty would not just remove the ability to make loan book sales to private equity firms or the so-called vulture funds referred to, it would also, in effect, remove the restriction on a bank to make any loan book sale to anyone. I have said time and again that loan book sales should only happen after every mechanism and option has been explored, something which has not been acknowledged in this debate. The reality is that the numbers of non-performing loans of the banks have to be reduced. In the period from 2008 to 2011 I heard speaker after speaker call for regulation, independent institutions and a Central Bank that was up to the job, but when the Central bank issues a statement of concern about this legislation, it is dismissed. Members cannot have it both ways. They cannot call for an independent regulator and strong Central Bank institutions and then, when they raise concerns about the effect of legislation such as this, dismiss them by saying they are not looking to serve a longer term interest and alleging various things about their intentions.

The challenging reality is that many of the banks have levels of non-performing loans in an economy that has been in income and employment recovery for many years which, in some cases, are too high. I have heard many speakers reference Permanent TSB, but I have not heard a single speaker reference the fact that at the start of last year Permanent TSB's figure for non-performing loans, as a percentage of its balance sheet, was nearly 24%. After years of effort, one quarter of its loans were impaired. I acknowledge that more could and should have been done for some, but after years of effort to try to reduce the level of non-performing loans, that is where the bank stood, at a multiple of the European average and way ahead of where many other banks in Ireland stood.

What has also not been acknowledged is that even if this legislation were to be passed, the banks would still have those targets. They are not targets which have been set by me; rather, they are set by the same independent regulator that this Dáil, in the aftermath of the financial crisis, stated we must have and could not undermine. They are the targets set and why have they been set? They have been set because in the awful event that we get into another economic crisis and if the banks enter it with the level of non-performing loans they had until recently, we will have banks that will not be as strong as they need to be in facing a changing economy, a new level of risk being created, a doom loop banking crisis and difficulties we have all said we want to prevent. That is why the levels of non-performing loans are being reduced and targets are being set to have them reduced. If a bank has a difficult balance sheet, it affects the rates of interest it can offer to new businesses and its ability to make new credit available to families, farms and small and medium sized companies Members and I represent.

As outlined by my colleague, the Minister of State, Deputy Canney, a money message is required for the Bill. It is my view that if the Oireachtas passes the Bill, it will have significant and negative consequences for the ability of the banks to meet the needs of the regulator in terms of regulation, for which many speakers both this evening and in previous years called. It is for that reason the Government is opposing the Bill, as well as the likely affect it would have on the financial interests of the State such that a money message would be required.

I will not allow any speaker to allege that because I am aware of wider interests that the banking system has to meet, in particular, the need to meet the requirements of an independent regulator which this Dáil, in the aftermath of the crisis, stated needed to be in place, and because I am making the point that the banks need to be able to meet new and existing investment and lending needs, I am indifferent to or do not care about the anxiety or worry citizens, including families, face. No Member of the House has a monopoly of compassion or understanding of the difficulties citizens can face. We have a range of supports in place that many speakers did not see fit to acknowledge.

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