Martin Mansergh (Tipperary South, Fianna Fail)
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The purpose of this amendment is to substitute a positive resolution process with regard to a scheme for financial support to guarantee credit institutions in place of the negative resolution in the Bill as initiated. The amendment which was signalled by the Minister for Finance in the Dáil earlier this morning reflects the importance of ensuring both Houses of the Oireachtas have an opportunity to consider and endorse a scheme dealing with key requirements for financial institutions benefitting from a State guarantee. Of particular importance is the mechanism for pricing the value of the guarantee for these institutions, as well as the terms and conditions to strengthen corporate governance transparency and risk management processes in the institutions which will benefit from the State warranty.

Richard Bruton (Dublin North Central, Fine Gael)
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I welcome the amendment. The Minister of State who attended much of the debate yesterday will be in no doubt as to what the Dáil expects in terms of the scheme and the appliance of new rules to the behaviour of financial institutions as a result of the taxpayer taking on this guarantee. Yesterday, we gave the Minister an arsenal of armoury which he can use to police this scheme. The difficulty which many on this side of the House have is that while the armoury is limitless, we do not yet know how it will be applied, in what circumstance or which arms, in particular, will be used. There were many issues raised yesterday about pay, bonuses, dividends and lending practices. We on this side of the House want those regulated to the maximum effectiveness. The Minister argued very strongly yesterday in the House that he did not share the view of this side of the House that embodying specific requirements would give the Dáil greater confidence. He argued instead that if we had specific requirements listed in the Bill, his power would somehow weaken. I find that very hard to accept. After listing the things the Minister will regulate, he has the capacity to do anything necessary to achieve the results.

This side of the House remains disappointed that there will not be more specific detail in the scheme. As far as we know, the scheme will only detail the charges, the revenue and the terms under which people can enter to participate. What will those elements of conditionality cover? We did not get to debate that yesterday. How far will the scheme go in listing the areas of protection and what are the conditions that will apply? Will the scheme list conditions that will apply to the way banks behave after they are inside it? Will we be left waiting to see what the Financial Regulator and the Minister's advisers come up with as time goes by? Clearly, the House would like to see as much detail within the scheme so we could be confident that maximum taxpayer protection is provided in it.

From what the Minister has said, I know that not everything we want and not everything that he has conceded during the debate will be in the scheme. However, it is very important that as much as possible goes into the scheme for Dáil approval, and that we are not asked to take too much on trust in respect of how the Minister and the regulatory authorities will apply the vast range of powers we have given to them in the Bill.

Will the scheme provide any additional details on the extension of the guarantee to institutions not covered? The Minister has indicated he will accept applications from other financial institutions and look at them sympathetically. We welcome that in principle. There are clearly different sets of protections necessary for the taxpayer in circumstances where an institution is not wholly regulated in this country. The assets of those institutions are limitless in one sense, but we do not know which of them will be attributed and assigned to Ireland, and should the guarantee be called upon, we may not know what will be assigned as available to the Irish State to deal with unwinding the guarantee it has given. I presume there will have to be a ring fencing of assets and there will have to be some additional rules that are currently not being applied to banks that are not wholly regulated in Ireland. It would be of benefit to the House if the Minister included details of those issues in the scheme we will be debating next week.

I welcome the concession made by the Minister yesterday. We have moved from the situation where the scheme would be laid before the House and the only possibility for the Oireachtas would be to devote Private Members' time to an attempt to reject the scheme. That was not a satisfactory approach at the outset, and I welcome the Minister's agreement to change that position, which is a product of this first amendment from the Seanad.

Joan Burton (Dublin West, Labour)
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I wish to acknowledge that the Government, in this amendment, is going some way to meet the first amendment put forward by the Labour Party last night, which was to have the scheme laid before the House before the Bill was enacted. We want clearer indications of the game plan, not just to protect the banks, but to protect the long-term strategic interests of the taxpayer and of the real economy in Ireland from the construction industry bubble and from speculation in complex financial instruments. We want the focus to be on protecting the real economy. In two weeks we face a very tough budget, according to indications from Ministers.

The guarantee given has provided stability to the six institutions named. As a consequence, the Irish national debt has a contingent liability of €400 billion, and if Ulster Bank is included, this contingent liability will be pushed up by another €60 billion, and by even more if two other institutions mentioned in the newspapers today are also to be included. We will see the Exchequer returns later today, and they do not seem to be great. When the Government goes to borrow, not just for investment in infrastructure, but for current spending as well due to the projected size of the deficit, how will the Minister price the extra cost of the borrowing that the Government will have to pay as a consequence of the guarantee?

John O'Donoghue (Kerry South, Ceann Comhairle)
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I must interrupt the Deputy. The Chair has no jurisdiction whatsoever in respect of order in the matter of Seanad amendments. That is a constitutional position. In debating amendments such as this, the Member is confined to the amendment and may refer to the section only in so far as it is affected by the amendment. Discussion, in effect, is extremely limited and is confined to the acceptance or the rejection of the amendment concerned. I have no discretion in that.

Joan Burton (Dublin West, Labour)
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It was the Minister himself who indicated that the scheme, which is the subject of the amendment, would sketch out the questions I am now asking. The cost of the scheme to the taxpayer is fundamental. After all, we will have to borrow money at a higher cost and I want to know how is the State going to pay for the scheme referred to in the amendment.

The Minister made a reference last night to the scheme seeking to curb reckless behaviour and compensation packages for bank executives. Can the Minister of State confirm that such curbs will be included? Will there be an examination of the banks' balance sheets to look at the issues, not just the liquidity issue addressed by the scheme but the underlying real issue of solvency and the quality of the assets in the banks' balance sheets? I refer in particular to the bad loans held by several of the banks due to lending for land and construction purposes. Many of these loans now seem to be seriously impaired and devalued. We would also like to know more about the additional banks being included. What parameters will the scheme have to prevent British banks who own banks in Ireland importing into their Irish subsidiaries debt and other instruments which the Irish taxpayer will then end up guaranteeing? How will the scheme be ring-fenced if we take on guarantees to British-owned banks operating in Ireland for the purposes of levelling competition and possibly meeting some EU requirements on competition? How are we going to ring-fence ourselves to avoid having to take on debts incurred by the parent company in the UK or elsewhere and passed on to the Irish subsidiary? If we have to do this, the cost to us will be significantly more.

The banks have said today that as a consequence of the guarantee and the scheme, money is now flowing in to Irish banks in the UK where they have UK branches. If this is just simply a case of ordinary deposits in the ordinary course of business, this means that the Irish banks are doing better. However, if this is hot money in speculative flows to take advantage of the Irish guarantee, we need to ensure that the scheme will include some caution or reserve on the banks participating in the scheme so that they will not be reckless with that money. A speculative bubble may be created whereby hot money is put into Irish banks and this money is loaned on neither wisely nor well.

We know that the Financial Regulator and the Central Bank come to all these items after the fact; everything is grand until something goes wrong. How will the Minister ensure that the fundamental interests of the Irish taxpayer are safeguarded? The amendment is welcome as it goes some way to addressing some of the issues raised by the Labour Party. However, given the manner in which the Financial Regulator and the Central Bank have operated in the past year and a half, as this crisis built up, I would much prefer if I heard that Deputy Brian Lenihan was having the odd chat with Warren Buffet or George Soros rather than entirely relying on the not so fantastic wisdom of the people down in the Central Bank or down in the office of the Financial Regulator. They seem to be permanently playing catch-up. These are the questions I would like the Minister of State to address.

Eamon Gilmore (Dún Laoghaire, Labour)
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As my colleague, Deputy Burton has said, this amendment arises from the debate held yesterday evening on the Labour Party amendment to which the Government responded.

When this amendment is approved by the House and the Bill goes for signature and following the decision made in the Seanad last night to approve the Bill, the taxpayers of the country will be providing a blanket guarantee to the Irish banks and not just to the six Irish banks who were initially listed in the Government's press release but, as I read it, to the entire retail banking system since it will be open to any bank with significant retail presence to apply for the guarantee scheme. I hope this works because if it does not work, there are very serious consequences for the Irish taxpayer. The Labour Party sought some assurances about those consequences during the course of the debate yesterday. We consistently raised those concerns over the past couple of days and I wish to pay tribute to my colleague, Deputy Burton, for the work she has done on this Bill on our behalf. However, those concerns were not adequately addressed by the Government which is why the Labour Party stood alone here last night in opposing the passage of the Bill. At no point has the Government been able to tell us the level of exposure to the State of the guarantee now being provided. We were initially told it would be approximately €400 billion which is a staggering amount by any standards and about three times the total national income. However, that total amount referred only to six institutions as initially listed. Last night we learned that it is now intended to extend it to other institutions but we do not know how many more.

The Bill now gives the Minister the power to offer a guarantee of an unlimited amount to banks which will have to be underwritten by the taxpayer.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I do not like to interrupt the Deputy but we cannot discuss the Bill now as we must deal with the amendment and there is no discretion involved.

Eamon Gilmore (Dún Laoghaire, Labour)
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Yes, but we are discussing the scheme and the process by which the scheme will be brought before the House. The scheme is intended to address these matters. The point I am making is that, unfortunately, the matters we wanted to have addressed in the Bill will now have to be addressed in the scheme. This is the reason I am referring to those matters.

Even within the six institutions the amount being guaranteed is growing. There are reports of funds moving from the UK to Ireland to avail of the guarantee and this in turn is now underwritten by this guarantee.

The Taoiseach has told the House and the Minister has repeated it that we do not have to worry, that the banks will end up paying. However, we have not been told how much they will pay or when they will pay it or by what means. One of the real and immediate costs to the taxpayer is the additional premium that this may add to the cost of Government borrowing. Again it has been said that the banks will pay but we still do not know how they will pay and how much they will pay and it is an issue as to whether that will be contained in the scheme.

In the course of the amendments presented by the Labour Party we had asked the Government to curtail the culture of greed that has brought us to this point. We have already argued that the six chief executives of the six banks which were initially covered by the scheme earn between them €13 million a year. Again the Government refused yesterday to include any provision in the Bill to curb that culture which has brought us here in the first place and to provide for a degree of what is referred to as "pay restraint" when reference is made to the pay of others. We are being told that we must take it on trust that something, somewhere will be done about it but we still do not know what that will be.

In the early hours of this morning, the Labour Party stood here alone to oppose the passage of the Bill because we were not given those assurances that we sought. Even so, I hope the Bill works and that the financial markets in Ireland will be stabilised, that Irish banks will succeed and that there will not be a requirement to draw down the guarantee that has been provided for in the Bill.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Gilmore, we cannot discuss the Bill. I have no discretion. The amendment provides for the laying of the scheme before the Houses and the methodology and the scope of doing this unfortunately cannot be discussed now nor can the legislation itself be discussed. I must confine myself to the amendments in from the Seanad because there is a constitutional imperative.

Eamon Gilmore (Dún Laoghaire, Labour)
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I thank the Ceann Comhairle.

I wish to refer to commentary on the Bill in today's edition of The Irish Times in an article by Professor Morgan Kelly. I suggest the Government should reflect on his views:

The reason that foreign banks started to shun Irish banks is that international investors have gradually become aware of the scale and recklessness of Irish bank lending to builders and property speculators.

He points out that of every €100 deposited in Irish banks, €60 has been loaned out for property speculation. I remember over the course of the past decade——

John O'Donoghue (Kerry South, Ceann Comhairle)
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I cannot allow this to continue Deputy. It is out of order, unfortunately, and I have to interpret the Standing Orders.

Eamon Gilmore (Dún Laoghaire, Labour)
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A Cheann Comhairle, if you wish I will preface every sentence by asking, "Will provision be made in the scheme to which this amendment refers...?"

John O'Donoghue (Kerry South, Ceann Comhairle)
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That would not be in order either. The scope of the scheme is not an issue. The question in accordance with the amendment which the Deputy wishes to addresses is that of laying the scheme before the House, not its methodology, scope or content.

Eamon Gilmore (Dún Laoghaire, Labour)
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Yes, a Cheann Comhairle.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I have no choice in this.

Eamon Gilmore (Dún Laoghaire, Labour)
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With the greatest of respect, the Ceann Comhairle referred to the Constitution. We have a constitutional right as Parliament to examine legislation and to form an opinion on it. There is a proposal before the House that we amend the Bill passed here early this morning to provide a new method for the scheme to be presented to the House. We must make up our minds as legislators as to whether we give approval to this amendment. For us to inform ourselves to exercise that constitutional right, which we still have, there are matters we can raise about the scheme that will be presented to the House. Among those matters that we raise is the extent to which the scheme will address concerns that have been raised by Members about the enormous guarantee we are giving to the banks.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I have no interest in arguing with the Deputy. The point is that the Standing Order provides that a debate on a Seanad amendment must be strictly relevant. There is nothing I can do about that. I have given much latitude in the debate on previous Stages. This time I am confined because if I do not enforce this a precedent will be set, which I cannot do.

Eamon Gilmore (Dún Laoghaire, Labour)
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A Cheann Comhairle, let me put it very simply. Taxpayers are being asked to underwrite a guarantee for every euro and cent in every bank in this country. We all want that money to be secure. There are concerns, however, about this. One concern is that some of the money loaned by the banks which has got us into this hole has been loaned out for property speculation.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Will the Deputy return to the amendment?

Eamon Gilmore (Dún Laoghaire, Labour)
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Up to €60 of every €100 deposited in Irish banks has been loaned out for property speculation.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy has long experience in the House and knows it would not be fair to the successors of this Chair or the House itself if I did not strictly adhere to the Standing Order in this instance. I insist the Deputy speaks to the amendment.

Eamon Gilmore (Dún Laoghaire, Labour)
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I am speaking to the amendment. This is about taxpayers' money. We spent a long time in the Chamber over the past two days on this debate. This morning reminds me why we face this problem in the first place. There were issues that were ruled out of order in the House and could not be raised in debate. If they had been allowed to be addressed——

John O'Donoghue (Kerry South, Ceann Comhairle)
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Will the Deputy return to the amendment?

Eamon Gilmore (Dún Laoghaire, Labour)
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I recall over the past ten years coming to the House to raise issues about what was happening in the property market and land speculation.

John O'Donoghue (Kerry South, Ceann Comhairle)
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We now only have 34 minutes remaining for debate.

Eamon Gilmore (Dún Laoghaire, Labour)
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I have argued in this Chamber that the State should intervene in what was happening in property speculation.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Deputy Gilmore, eight Members are offering and we must be fair to them as well.

Eamon Gilmore (Dún Laoghaire, Labour)
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If an intervention had been made we would not have this problem now.

John O'Donoghue (Kerry South, Ceann Comhairle)
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If Members wish to change Standing Orders, I am quite happy to do so. However, that is not the position. I call on Deputy Caoimhghín Ó Caoláin. Please try to address yourself to the amendment and understand my position.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I welcome the amendment and will be supporting it. I welcome its passage through the Seanad this morning and acknowledge the Minister's response to the positions articulated by our respective spokespersons during the course of last evening's debate. I want to record my appreciation of my party colleague, Deputy Arthur Morgan, who was our lead participant in this debate over the past several days. I thank him and his support staff for their attention to detail.

The presentation by the Minister of the draft of the proposed scheme that will be laid before the House is eagerly awaited. That said, the engagement that has taken place over the past couple of days must be seen as not only an important but also a difficult debate, particularly for Members on the left. The crisis we have all faced over recent weeks was a direct result of the reckless behaviour——

John O'Donoghue (Kerry South, Ceann Comhairle)
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No. Sorry Deputy, but we must stick to the amendment. You have heard me speak about this to Deputy Eamon Gilmore.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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This is in the context of the amendment.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I have no choice and I must enforce Standing Orders.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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You could at least let me get the second sentence out, a Cheann Comhairle, and be consistent.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy has gone off on a generality.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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No, not at all.

John O'Donoghue (Kerry South, Ceann Comhairle)
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We must address the question of the laying of the scheme before the House.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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If you had some patience, a Cheann Comhairle, you would see it will refer to the amendment. This crisis is a direct result of the reckless behaviour of leading players in the banking sector and the Government's failure to put in place adequate regulations to protect——

John O'Donoghue (Kerry South, Ceann Comhairle)
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You must stick with the amendment Deputy.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I am sticking to the amendment. Are we allowed to speak here at all?

John O'Donoghue (Kerry South, Ceann Comhairle)
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Of course, but stick to the amendment.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Allow me to proceed then.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy cannot start a Second Stage speech. I have said already that I must adhere to Standing Orders in this instance.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I am well full of Second Stage speeches that were made all day on a Committee Stage amendment yesterday. The Ceann Comhairle facilitated that, so he can allow participation here this morning on these amendments. I could well be finished and we could be on the second amendment if I was not being continually pulled up.

What is being proposed in this first amendment? We must have the opportunity for scrutiny. The Minister's amendment, passed through the Seanad, is consequential to the debate on Committee Stage amendment No. 1. It was also very much in line with the arguments presented by my colleague in amendment No. 8 for section 5 which was not accepted or responded to by the Minister.

It sought the guarantee that the House would have the opportunity to debate the draft of the proposed scheme, which this amendment proposes. Time after time we have seen Government proposals on the Order Paper that facilitate the passage of proposals and resolutions without debate. Debate on this scheme is essential. I would have liked this amendment to go further and to know what guarantees the Government is prepared to offer the House. I would have liked the amendment to include the opportunity of detailed scrutiny of the draft scheme in advance of the Minister moving on his respective resolutions. That is the guarantee we require and the context of my contribution to this amendment. I want the reassurance that the House will have the opportunity to properly peruse and address the detail contained in any of the draft schemes or a resolution.

In deference to other Members offering and the Ceann Comhairle's tetchiness this morning — I suppose due to the lack of sleep——

John O'Donoghue (Kerry South, Ceann Comhairle)
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There is no tetchiness here.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Sinn Féin did not take its position in supporting this Bill lightly. We have our concerns and reservations but we decided to support the passage of the legislation because we believed it is about more than the banks. It is about offering security to ordinary citizens——

John O'Donoghue (Kerry South, Ceann Comhairle)
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No, I cannot allow that. I have eight other Members offering and only 29 minutes remains.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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——to investors and Irish businesses which means, in turn, the protection of Irish jobs. We await sight of the detail of the Minister's proposals.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I have no discretion. I call on Deputy Enda Kenny.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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I am sure the Ceann Comhairle will be just as interested in that detail and the presentation of the resolution over the next several weeks.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I am far more interested in discussing the amendment. I call Deputy Enda Kenny.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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We need the terms and conditions and full access to the Minister's intent.

We need an outline of the true level of underwriting because I do not believe the full reality has been spelled out here regarding what the Minister really intends. That detail we will watch with great care and I look forward to having the opportunity for further address of this important measure in its out-working over the weeks ahead.

Enda Kenny (Mayo, Fine Gael)
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I accept the amendment from the Seanad, emanating from that body's deliberation of the Bill put before the Dáil.

The country was faced with a financial crisis last weekend and the Legislature was asked to respond by providing the nuts and bolts of a financial and legal architectural structure that would underpin the economy and provide for a banking system that would allow people to go about their business. If one walks down the street, who does one meet? One meets persons involved in business, in ordinary life——

John O'Donoghue (Kerry South, Ceann Comhairle)
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We must deal with the amendment, Deputy Kenny. I must be consistent on that.

Enda Kenny (Mayo, Fine Gael)
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I will deal with the amendment now.

In order for every one of those people to be able to go about their normal business——

John O'Donoghue (Kerry South, Ceann Comhairle)
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Please deal with the amendment.

Enda Kenny (Mayo, Fine Gael)
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——it was necessary for the Legislature to respond to the crisis it faced. In so far as that is possible, this Legislature having considered the matter, has given the Minister for Finance enormous authority to build the required legal and financial framework in which this particular amendment and scheme will become visible. There are probably only one or two people who have full knowledge of the scale of what is required to be built here. We do not know how solid, or possibly infirm, are the foundations.

The amendment is the first evidence of the Minister for Finance standing by his word. He said yesterday he would put this amendment to the Seanad and if Members there agreed with it and passed it, he would bring it back to the Dáil today. That has been done. He also said this country is now getting in very deep with the banking system. He followed that by saying he would take on board the comments made by members of the Opposition, particularly Deputy Bruton, on regulatory oversight being part of the scheme that he must present to the House next week. I hope the Minister will also follow through on his other words about public representation on boards, oversight, risk management committees, remuneration packages and so forth.

I would like to think that when the Minister comes back to the House with his scheme on Tuesday or Wednesday, the issue of how the charge to the banks is to be determined and by whom will be part of what he lays before us. The Financial Regulator does not have the wherewithal, in terms of personnel, to do that now. If it is necessary to provide assistance or resources to the regulator to provide the competence in defining the charge and how it is to be applied, I hope that will be done.

The House has placed an enormous amount of trust in the Minister of Finance, on behalf of the people. We do not know the full complexity of the issues. The Department of Finance officials, who were here until the early hours of this morning, are — if they have recovered from the first onslaught of complexity — putting their minds to the proposed scheme and are drafting it. Deputy Quinn will know from his days as Minister for Finance that these people are now putting together the framework of the scheme that is to be laid before us next week. At the same time, in the boardrooms of banks all over Europe, people are meeting to consider the consequences of the legislation that is in its final phases in this House and which is to be signed by the President later, if that be so. As the elected representatives of the people, operating in defence of our economy and banking system, we are not in possession of all the information on the current crisis. In that context, we have to hope the framework we have given the Minister the capacity to build will withstand any charge.

The Minister for Finance received strong bipartisan support in the discussions that took place here. Irrespective of the fact the Labour Party decided to oppose the legislation in the end, very constructive suggestions were made by Members of the House. As this unfolds, I hope the Minister for Finance will take into his confidence either the party leaders or the finance spokespeople of the parties and give them relevant briefings on an ongoing basis so this Parliament is not kept in the dark about what is going on. That is particularly relevant in the context of the scheme to be presented here next week.

I thank all Deputies who made contributions and pay particular tribute to Deputy Richard Bruton for his expertise in this field. We accept this amendment and hope that what has been provided to the Minister for Finance will be sufficiently strong, legally, financially and constitutionally, to withstand any contingency that might arise.

Seán Barrett (Dún Laoghaire, Fine Gael)
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This amendment, which I support, may appear to be just technical but its importance should not be underestimated. While it simply says that the Minister proposes to make a scheme, the most important point is that until both Houses approve that scheme, the Bill does not come into operation. When we are debating this particular technical motion, it is important the message goes out that what is required by Members on this side of the House in particular is taken into account in what goes into the scheme. I do not want to be in a position next week whereby a crisis emerges because Members on this side of the House, for some reason, find it impossible to vote through the scheme. It is very important that people listen very carefully to what is being said by spokespersons and other Members regarding what the scheme will contain.

My deep concern centres on the regulatory authorities in this State and the role they will play in the process of devising the scheme. I am a member of the Joint Committee on Finance and the Public Service. That committee met representatives of the major banks recently and I left that meeting thinking our banks appeared to be safe enough, with stress testing of all sorts of things——

Joan Burton (Dublin West, Labour)
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It sounds like body building.

Seán Barrett (Dún Laoghaire, Fine Gael)
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We then met the Governor of the Central Bank and having listened to the Governor, I left that meeting believing everything was hunky dory. However, I saw the shares in our banks dropping in value after both of those meetings and I could not understand what was going on. I wondered if somebody was speculating or endeavouring to take out one of the Irish banks deliberately. I did not know what was going on because those important people, the bank representatives and the Governor of the Central Bank, taken on trust, appeared before an Oireachtas committee and gave assurances of a nature that suggested the legislation we are debating was not necessary. That brings home to me the importance of the independence of the Governor of the Central Bank.

The independence of the Governor, who can appear before an Oireachtas committee and give assurances, is paramount in any democracy. The general practice here has been that the retiring Secretary General of the Department of Finance goes on to become the Governor of the Central Bank. It is time that practice ceased. I am not casting any aspersions——

John O'Donoghue (Kerry South, Ceann Comhairle)
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We must deal with the amendment, Deputy.

Seán Barrett (Dún Laoghaire, Fine Gael)
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This is relevant to the amendment. I am not casting any aspersions on the current office holder but the general principle of a continuation of policy from the Department of Finance right through to the Governor of the Central Bank is not good in a regulatory system. I would like the Governor of the Central Bank to be totally independent of everybody and not embarrassed to carry through Government or departmental policy when governing the institution. When we include provisions in this scheme, we should be absolutely certain that Members of the House will be able to meet members of the electorate and say they did everything possible to guarantee their money would never be in doubt. We must be certain there is a regulatory system in place — I hope regulatory sanctions will never have to be used — that will do everything to recover money, if necessary.

Paul Gogarty (Dublin Mid West, Green Party)
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I welcome the amendment which takes cognisance of the main concerns expressed by the Opposition parties. Deputy Burton who has made a tremendous contribution may have preferred the Minister to outline specifics in the primary legislation but, as I and others stated yesterday, the Bill needs to be passed as a powerful framework as quickly as possible to restore confidence in the financial sector and reassure the ordinary people of Ireland that it is not simply a bailout for the fat cats.

John O'Donoghue (Kerry South, Ceann Comhairle)
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We cannot discuss the legislation.

Paul Gogarty (Dublin Mid West, Green Party)
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It is about carers and ordinary workers, including those who work in the banks.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy should speak to the amendment only.

Paul Gogarty (Dublin Mid West, Green Party)
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It was not possible in the short time available to outline a scheme because of the aforestated imperative and also because any scheme might be subject to change due to market fluctuations. The amendment made in the Seanad addresses the issues raised and shows a firm commitment to moving forward such that, by this time next week, the outlook will be clearer. The legislation being passed today will continue to spread confidence and the other issues can be addressed next week. Should the Bill be passed now, the issue of land reform will need to be addressed to stop speculation which has also caused the problem that has arisen.

Michael Kennedy (Dublin North, Fianna Fail)
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Having listened to the debate and particularly the comments of our colleagues in the Labour Party, I cannot help but feel that party is slightly embarrassed today having voted against the proposal last night.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy should deal with the amendment.

Joan Burton (Dublin West, Labour)
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We are very happy with our vote.

Michael Kennedy (Dublin North, Fianna Fail)
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Just like everyone else, I am granting myself a slight bit of latitude. I am just making the point that the Labour Party did not don the green jersey, as Deputy Kenny said.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy should speak to the amendment.

Michael Kennedy (Dublin North, Fianna Fail)
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Fine Gael, Sinn Féin and the Independent Members backed the Government in the national interest. This was very necessary because——

John O'Donoghue (Kerry South, Ceann Comhairle)
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On the amendment.

Michael Kennedy (Dublin North, Fianna Fail)
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I am coming to it.

John O'Donoghue (Kerry South, Ceann Comhairle)
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Please come to it immediately.

Michael Kennedy (Dublin North, Fianna Fail)
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I am, but it should be highlighted that the Labour Party should have donned the green jersey. It did make valuable contributions——

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy cannot speak about that matter; he should stick to the amendment.

Michael Kennedy (Dublin North, Fianna Fail)
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I am coming to it.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I must be consistent.

Ruairi Quinn (Dublin South East, Labour)
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That is the sort of argument that leads to the logic of the one-party state.

Michael Kennedy (Dublin North, Fianna Fail)
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The other Deputies——

Joan Burton (Dublin West, Labour)
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No wonder the Government lost the referendum on the Lisbon treaty.

John O'Donoghue (Kerry South, Ceann Comhairle)
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I am not going to get into an argument and do not have enough time for it. We must stick to the amendment and there is a very good reason for doing so.

Michael Kennedy (Dublin North, Fianna Fail)
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I am coming to it. I welcome the fact that the Seanad passed it last night. Will the Minister of State impress upon the Minister for Finance that the cost of the scheme, the full details of which he is to announce next week, should not be borne by the customers of the banks? The cost incurred by the banks in obtaining the State guarantee should be paid from their net profits and not passed on by way of increased bank charges to customers. We need to have total transparency in all the documentation we receive next week. Everyone believes what we have done is correct but the public, including customers, has a right to answers to certain questions.

I read in this morning's newspapers that it has been indicated that bank charges will come down following the stabilisation of the market, in the United States and elsewhere.

John O'Donoghue (Kerry South, Ceann Comhairle)
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That has nothing to do with the amendment. The Deputy should stick to the scheme.

Michael Kennedy (Dublin North, Fianna Fail)
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I welcome the amendment made by the Seanad last night. I hope all Deputies in the House will vote in favour of the Bill in the national interest.

Ruairi Quinn (Dublin South East, Labour)
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I have a procedural question for the Minister of State. Seldom have we debated regulations in the House following the passage of primary legislation. In this instance, the text of the amendment states, "he or she shall cause a draft of the proposed scheme to be laid before each House of the Oireachtas". Perhaps the Ceann Comhairle, the Chief Whip or the Minister of State, Deputy Mansergh, or his officials, will state whether it will be open to the House to suggest additions or amendments to the draft. Will there ultimately be a simple vote in favour or against it?

Kieran O'Donnell (Limerick East, Fine Gael)
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I welcome this good measure. To follow on Deputy Quinn's point, it is important that, in keeping with the procedure, it will be possible for the Opposition to table amendments to the draft of the scheme. The guarantee offered is effectively like insurance; therefore, the State should be looking for a return. We are providing a facility for the banks and should be looking for a return for the State, not necessary a return that would involve breaking even but a return nevertheless.

We must seek the recapitalisation of the banks.

John O'Donoghue (Kerry South, Ceann Comhairle)
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We cannot discuss that matter now. The Deputy should deal with the scheme or the charge.

Kieran O'Donnell (Limerick East, Fine Gael)
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We are dealing with the liquidity issue and must also deal with solvency. The banks must not indulge in reckless trading.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy should deal with the scheme or the charge.

Kieran O'Donnell (Limerick East, Fine Gael)
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The key factor is that the Financial Regulator and the Central Bank have failed. They were like a referee at a match who did not blow the whistle. If one does not blow the whistle, players will commit fouls.

John O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy must deal with the amendment.

Kieran O'Donnell (Limerick East, Fine Gael)
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The institutions very much look out of control. I hope the Minister will take this on board.

Martin Mansergh (Tipperary South, Fianna Fail)
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I thank all Deputies for their contributions to the debate, particularly the spokespersons and leaders of Fine Gael and the Labour Party. The Minister will take careful account of everything that has been said in the House, both this morning and last night, in drafting the scheme and proceeding generally with the legislation.

In reply to Deputy Bruton and others, the basic point is that the content of the scheme is under review by the Minister. However, there are a number of areas that may be included, for example, the need for individuals with a public interest perspective on the boards of our credit institutions; codes of practice for the work of risk committees in financial institutions; pro-enterprise lending practices; quality of management; checks on remuneration approaches that reward short-term performance and excessive risk-taking; the need for a return to traditional banking values in all our credit institutions; responsible and prudent lending practices in consumer lending; promotion of corporate social responsibility; careful assessment of the risk characteristics and sustainability of new financial products; and ensuring the highest standards of regulatory compliance and effective standards of corporate governance which ensure bank boards take full account of their broader responsibilities to society at large.

The Minister is considering the issue of a possible extension of the scheme. It has not been determined whether the scheme will deal with this. It is obviously not appropriate in advance of the presentation of the scheme to discuss in detail the content beyond what the Minister has outlined. I fully agree with Deputy Burton that the whole point or motivation of this legislation is to protect the real economy, living standards and jobs. The legislation has been brought forward because of fears of the impact untoward events would have had on the real economy, as she calls it, if that action had not been taken.

The issue was raised as to whether the scheme would affect the budget. It will not affect the general Government debt or general Government borrowing unless liability is realised. The issue was also raised about UK-owned subsidiaries operating in Ireland. No decision has been taken and the Minister has indicated he will consider it. The Government will have no tolerance for any financial institution which seeks to exploit competitive advantage from this guarantee. It is the Minister's intention to calibrate the payment for the guarantee such that a balance is achieved in the market between those that benefit from it and those that do not.

Comments were made about the Financial Regulator. It is important to put on the record that a number of important steps were taken by the regulatory authority in response to the very rapid growth in credit, including the introduction of the consumer protection code to safeguard the interests of consumers in their dealings with financial institutions, which included such requirements as client suitability, "know-your-customer" requirements, the stress-testing of loans to plus 2.75% above current lending rates and increased capital provisioning for riskier loans, such as property development.

The Minister has stated that higher funding costs for the Government should have input into an assessment of the charge imposed on those benefiting from the scheme. Certainly, there may be an increased cost of borrowing due to higher funding costs which have added eight basis points.

Pat Rabbitte (Dublin South West, Labour)
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There is already.

Martin Mansergh (Tipperary South, Fianna Fail)
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Yes, there is. In response to Deputy Ó Caoláin, we acknowledge the support Sinn Féin gave to the Bill, which I am sure was for broader strategic interests and the protection of the real economy. I understand the difficulties this may have caused.

While it is obviously the intention and expectation that any such motion on the scheme would be debated in the Houses of the Oireachtas and certainly in practice it will be, the amendment tabled last night was rejected because it would restrict the discretion of the Houses in the ordering and conduct of their business. That was, if one likes, a formal position. Deputy Quinn raised the issue that the Dáil will simply have the power to approve the scheme or not, and will not have the power to change it. That is the position.

Ruairi Quinn (Dublin South East, Labour)
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The Government could by discretion remove that restraint.

Martin Mansergh (Tipperary South, Fianna Fail)
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All I can state is the position.

Ruairi Quinn (Dublin South East, Labour)
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Is there discretion in this matter or is it fixed in the Standing Orders of the House? We might get clarification on this point. We were in unique circumstances and the response from the Opposition could be greatly changed if there was some flexibility in the interpretation of that Standing Order.

Martin Mansergh (Tipperary South, Fianna Fail)
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The position is perhaps a little more subtle. While it is the case that the House can agree or not agree the draft scheme, the Minister can, of course, withdraw the scheme and resubmit a revised scheme in light of comments.

Ruairi Quinn (Dublin South East, Labour)
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Spoken like a true mandarin.

John O'Donoghue (Kerry South, Ceann Comhairle)
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A republican, even.

Martin Mansergh (Tipperary South, Fianna Fail)
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A point made by Deputy O'Donnell implied the Government should be seeking a take or profit from the situation. The emphasis of the Government will be on full cost recovery.

Kieran O'Donnell (Limerick East, Fine Gael)
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The Government is helping the banks. It should seek a return for the taxpayer.

Martin Mansergh (Tipperary South, Fianna Fail)
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Section 6(4) states that "all financial support provided shall so far as possible ultimately be recouped from the credit institution ... to which the support was provided". That is a fairly clear statement of principle.

Seán Barrett (Dún Laoghaire, Fine Gael)
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On a point of order, the explanatory memorandum states that not alone can it recoup it but it can do so with interest.

John O'Donoghue (Kerry South, Ceann Comhairle)
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That is not a point of order.

Martin Mansergh (Tipperary South, Fianna Fail)
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It is still a form of recoupment.

Kieran O'Donnell (Limerick East, Fine Gael)
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The Government is providing an insurance scheme on behalf of the taxpayer. It should be making use of the public purse on the basis——

Martin Mansergh (Tipperary South, Fianna Fail)
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Deputy Barrett, in a sense, has answered the point as far it legitimately goes.

In response to Deputy Kenny, leader of Fine Gael, I would like to acknowledge the very constructive role of the Fine Gael Party in this whole debate. All sides of the House have appreciated the acute strategic importance of dealing with this situation correctly and in a way that would prevent very adverse consequences. I note and will pass on the Deputy's points with regard to resources and assistance that might be needed for oversight. It has always been the practice, in so far as I have been able to observe it going back 25 or 30 years and probably a great deal longer, that leaders of the Opposition or spokespersons, as the case may be, are consulted when anything of urgent or critical importance in the national interest must be decided.

To address points made by Deputy Barrett, when credit institutions appeared before, say, the Joint Committee on Finance and the Public Service or other committees, I am certain the statements made about the solidity of the banking system were valid at the time but obviously the pace of global events in the past month, particularly the past week, may have overtaken some of what was said.

In defence of the Central Bank and the Department of Finance, I must say they have both served us very well and I would not accept the point that we have been in any way badly served——

Seán Barrett (Dún Laoghaire, Fine Gael)
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I did not say that.

Martin Mansergh (Tipperary South, Fianna Fail)
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——by the fact the Governor of the Central Bank has often been the Secretary General. We have an enviable record over the past 80 years.

Deputy Gogarty made the point that, essentially, many lessons must be learned. Indeed, they must.

John O'Donoghue (Kerry South, Ceann Comhairle)
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In accordance with an order of the Dáil of this day, I am obliged to put the question: "That the Seanad amendments not disposed of are hereby agreed to in Committee and agreement to the amendments is accordingly reported to the House."

John O'Donoghue (Kerry South, Ceann Comhairle)
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A message will be sent to the Seanad acquainting it accordingly.