Pat Rabbitte (Dublin South West, Labour)
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The motion before us in the name of Deputy Richard Bruton is a fairly broad and comprehensive resolution. It could be said this motion relates to the restoration of confidence in the management of our economy. The first element of the motion is the need to take control of the direction of the public finances, a debate which to some extent we have already had. The second aspect is the banking crisis and the chicanery at senior level in some of the banks up to now, the crisis of confidence this has caused among the public and the disbelief it has caused among the international investment community.

One gets an idea of how serious is the situation when one reads an article in last Monday's The Financial Times wherein the author refers to what happened during the exchange rate mechanism when Britain eventually fell out of the system. Although he makes the point that clearly one cannot bet on exchange rates in a monetary union, he points out what can and is happening. The article states:

Thanks to credit default swaps you can place convenient bets on the break up of the eurozone. Last week speculators bet on an Irish default and these bets made it more expensive for Ireland to refinance its debt thus threatening to turn into a self-fulfilling prophecy.

The gravity of this does not need to be underlined. The immediate impact of this is, of course, an increase to this State in the cost of borrowing. If the investment community were to target this country in that fashion, the situation would be so serious we would require the protection of other eurozone States. For this reason, we need to get our banking system right. So far, we have failed to do this.

I heard on the news this evening that the Bank of Ireland has appointed a new chief executive, an internal appointee, Mr. Richie Boucher, whom I wish well. However, having regard to everything that happened, I would have thought we might have gone outside, at least the bank if not the country, to fill this position. Also, the bank has stated it will not disclose his pay rate. One wonders if any lessons have been learned.

The former chief executive of Bank of Ireland complained on television that his income this year would fall below €2 million. Notwithstanding the notoriety those remarks attracted, the bank now says it will not disclose the remuneration of the new chief executive. The manifest unfairness of this is driving people crazy in terms of the recently adjourned debate in respect of the pension levy. Tens of thousands of public servants have stated they do not mind playing their part if others play their part too. Now, the wealthy elite tell us the remuneration of the new chief executive is none of our business.

I would like now to focus on the regulatory system. It is often said bankers who become greedy will do what some greedy bankers do. However, one would expect the regulatory system to police the banking system. Quite frankly, this has manifestly not been happening. Following the DIRT inquiry, then senior council Michael McDowell was brought in to draft a report on regulation. A tug-of-war ensued between the two parties in Government following which we had the hybrid creation of the Irish Financial Services and Regulatory Authority, IFSRA, which was neither stand-alone nor within the aegis of the Central Bank, although in many senses, and in more senses than the obvious, was under the roof of the Central Bank aggravating the cosy club mentality that exists between senior bankers and regulators in this country.

While there are advantages to the smallness of Irish society, there are also disadvantages. I believe this to be a cosy club. The more one examines what happened the more likely one is to come to that conclusion. I do not say this by way of denigrating the decent people employed by the Regulator or in the Central Bank. How in the name of God could what has happened have happened with all of the adverse serious implications for our international reputation? How could the regulatory authority, with 388 people costing €58 million per annum, not for one, but for eight years, have missed the directors' loans issue?

It is clear from the statements from Irish Life & Permanent that people are massively aggrieved at the manner in which they are being treated in public, which will certainly raise a number of eyebrows. Why should they be aggrieved? They are aggrieved because they are under the impression that these practices between the financial institutions were, if not approved, condoned and tolerated. There is a good deal of evidence to suggest that the word went out that a blind eye would be turned if the green jersey was donned and these transactions between the financial institutions were carried out. One can say the transaction that caused everything to eventually blow up was that of Irish Life & Permanent misrepresenting two significant lodgements as a normal depositor's transaction some few hours after the bank guarantee was introduced and on the same day as the financial year end. One could suggest that was a step too far but the view in some circles is that this was condoned, that inter-transfers to support the banking system were given the green light by the regulatory authority and acquiesced to. All of the evidence to date — we may change our view when we have all of the evidence — suggests that was the case. This is a serious situation for us.

Why the regulatory authority is now involved in investigating what went on defeats me. Currently, three investigations are taking place. How can one expect the regulatory authority to investigate its own role? This was a case of regulatory capture. The regulator was captured by the banking system, got too close to it, sailed too close to the sun in good times, came acroper in these times, and as a result we need to, as the motion provides, remove the board of the regulatory authority. Also, we need a new stand-alone regulatory mechanism, preferably with an international dimension. The same people are in place, as the appointment in Bank of Ireland this evening bears out. The bank did not search outside; it appointed one of its own. He may be an excellent manager; I hope he is and wish him well, but that is the way things operate in this country. We need a new stand-alone regulatory authority and the current board should be moved aside. I do not wish to cast any reflections on the people who work there, but the culture that has obtained up until now has put us into very deep difficulty and seriously and adversely impacted on the reputation of the country abroad. That change is critically important in terms of the future solvency of the country.

Beverley Flynn (Mayo, Fianna Fail)
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I wish to share time with several Deputies.

Brendan Howlin (Wexford, Labour)
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They are Deputies Moynihan, Conlon, Byrne, O'Brien, Fahey and Dooley.

Beverley Flynn (Mayo, Fianna Fail)
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I am pleased to speak to the motion. It is very important to give confidence to international markets about our financial sector and long-term future. It is critically important that we do so at this time. There is little point in coming to the House and providing bank guarantees and for recapitalisation of the two main banks at a cost of €7 billion to the taxpayer if we continue to talk down the financial sector causing a loss of confidence, domestically and internationally. Everyone in the House has a responsibility to stop doing so. There have been outflows of funds from Ireland which can only create further damage to the economy due to a lack of liquidity. This helps no one. It is important that everyone in the House recognises that point and seeks to provide the necessary solutions and attempts to do so collectively. People must stop making political hay at the expense of the country. We are all aware that regulation is grossly inadequate. The previous speaker made reference to this fact. Everyone acknowledges it and it must be dealt with. We are also aware that senior bank executives are paid far too much. As Mr. Barack Obama said in the United States today, that day is over. It is over in Ireland too. It is outrageous that a senior bank executive could earn more than the Taoiseach, the most senior individual in the country. It is hard to believe any bank executive could earn more money than him, even though he is running the country.

Pat Rabbitte (Dublin South West, Labour)
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It is not over, Deputy Flynn.

Beverley Flynn (Mayo, Fianna Fail)
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It is because the people are demanding it. We have a collective responsibility to ensure it becomes a reality. It is also important that those found guilty of wrongdoing are brought to justice. The people must see that these issues are being addressed as a matter of urgency. The Government and the House will do so, but there is a collective responsibility on all Members to do so in a responsible manner and in the best interests of the country and the economy.

We should reaffirm that the bank guarantee scheme is operational until September 2010. This provides a further layer of security for depositors who have money in the banks. I say this with a view to assuring those people who have money in Irish banks that it is secure. It is important that we acknowledge that a further extension of the guarantee scheme may be considered, if and when needed.

It is worth remembering that the country still has an AAA rating. The international rating agencies which have put us on the watch in negative terms view the €2 billion cuts in public expenditure agreed to by the House very positively. This augers very well for the country in accessing money at favourable rates.

Michael Moynihan (Cork North West, Fianna Fail)
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I welcome the opportunity to contribute to the debate. As is the case on many occasions, the debate taking place in the House is very important. In the light of the events and revelations of recent months, this is one of the most crucial debates. We have reached a crucial point. In the time available to me I could deal with a raft of issues relating to the monetary situation and our credit rating in international markets. However, I refer to regulatory matters and especially the absolute breakdown of regulation. It was said in the debate last night that financial regulation throughout the world had been very lax. It seems our regulatory system failed us completely.

In reference to any crisis or issue of recent years we must examine where mistakes were made, follow through and ensure what occurred is never allowed to recur. There has been reckless lending by some financial institutions which has led to very severe difficulties with the loan books and on borrowing sheets of the banks. However, we should bear in mind that there is another group of people who will spend the next 30 years, or perhaps longer, paying for the reckless lending engaged in in recent years. This group is especially made up of young couples who bought houses and are now in negative equity. We must examine their situation. Many are facing jobs losses because of the international downturn and some have lost their jobs already.

Deputy Rabbitte alluded to the situation in Bank of Ireland, but there must be root and branch reform and a sea change. Some have said that between 1989 and 1990 the communist system collapsed worldwide. The world has collapsed in recent months. As the revelations unfold, not only in Ireland but throughout the world, there are serious difficulties emerging. It is time to examine these and look outside the box. We must make fundamental changes to the way banking operates in this country and throughout the world. We must examine the practices, culture, amount of money generated or lent and practices of some financial institutions which have come into the public domain. We must change this culture.

The pay of the chief executives and others in financial institutions was mentioned. The public is incensed by the amounts of money earned. Last week we heard one person refer to a reduction in his salary, leaving him with an income of €2 million. Such pay must be capped. We must be seen to be responsible. We should bear in mind that the banks make profits from their customers, that is, from each and every individual throughout the country. However, they have a duty to look after their customers in a responsible and efficient way and in a way which is morally guided.

The regulatory system was established with the Central Bank and there must be fundamental changes to it. Someone must take over the role of either the Governor of the Central Bank or the regulator. Whatever system is put in place should have someone at the top from outside with no allegiance to the current banking system or the Central Bank. Any new system must have an independent voice and authority to ensure the fundamentals are sound. The fundamentals of the financial services sector will serve us well in the coming years, if we manage change correctly.

We should bear in mind that this is not the first time financial institutions have lent recklessly in Ireland — others have said as much. In the late 1970s and early 1980s the banks lent recklessly to the farming community. We did not learn our lessons at that stage. Many farms went out of business because of it. We must put in place a draconian regulatory system. I will support the Government in any attempt it makes to ensure such a draconian law is enacted to ensure we will never again end up in the position in which we find ourselves.

Margaret Conlon (Cavan-Monaghan, Fianna Fail)
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Gabhaim buíochas as ucht an deis labhairt anocht. Dúirt mé cheana féin sa Teach go raibh an tír seo i gcruachás. Tá sin fíor fós. Is eol dúinn uilig go bhfuil cúrsaí go dona, ach caithfimid obair le chéile chun réiteach a fháil. Caithfimid admháil gur ar mhaithe le leas na tíre a tógadh an cinneadh an Banc Anglo Irish a náisiúnú. Tá fadhbanna lenár bancanna, ach tá próiseas ar siúl fé láthair agus ní féidir cúiseamh a dhéanamh ar dhuine ar bith. Caithfear gach rud is féidir a dhéanamh chun ainm an tír seo a ardú arís agus níl an dara rogha ag an Aire. Tá fiosrúcháin ar siúl chun a fháil amach céard a tharla agus chruthaigh an tAire nach bhfuil na bainc saor ón dlí. Cuirfear an dlí orthu más gá. Inné, ní raibh ansin ach an chéad céim.

I thank the Leas-Cheann Comhairle for the opportunity to speak on this motion this evening. Reports of what happened in Irish banks, especially in Anglo Irish Bank turn one's stomach. The behaviour of these people and their contempt for our national banking system, their shareholders and, above all, the people raise serious questions. Where is the nation moving? There is an obsession with wealth and money, with cultivating an image, with building a vacuous persona based on loans, gambles and hedged funds which have proved to be vulnerable, weak and debilitating foundations. When people of influence in Irish and international banks with millions of euro start cutting corners and taking short cuts and a recession hits, there is a serious and grave fall out.

We are in a global recession. Other countries are in recession. They were not in a property bubble or experiencing malpractice at the top of their banks. We need to start focusing on the problems, their causes and the solutions. The Minister for Finance has one of the most difficult jobs in the country. People want us to work together to find real solutions, not fluffy, populist headline grabbers such as "Nail the Fat Cats". We cannot have kangaroo courts. We must have due process and allow for investigations to be conducted and any sanctions which law enforcers deem necessary must be enforced. No one is above the law.

The Opposition has complained, argued for leadership, for change and reform, and that is its job. There is a serious lack of confidence among purchasers and consumers which leads to fear of spending money. It may lead to a fear among investors but money is available. Thankfully, many people are still working. A new phenomenon in this economic crisis is that America, the United Kingdom and most of Europe are in the same boat.

There are businesses crying out for funding. We have helped the banks and now they must help businesses survive. We need to take stock of where we are, what we have done well, and examine the errors so that we can get the most efficient and effective return on all future investments. Our banks have shaken the confidence of people here and overseas in our banking system and our economy.

Naming the so-called "golden circle" and sacking anyone with power in the banks are knee-jerk populist wishes. Will that get us where we want to go? We need solutions. When we look back in 15 or 20 years' time, will we regret denying due process and natural justice to satisfy a media frenzy? We want true justice and would be failing as legislators if we were to jump to the tune called on any given day. People who deserve it must be sacked, fined or jailed. We need to build confidence in our banking system and send out a strong message that Ireland is open for business.

Thomas Byrne (Meath East, Fianna Fail)
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I am glad to have the opportunity to take part in this debate and to participate in this Dáil, whose primary focus is to address the loss of jobs. One way to do so is to restore the country's financial reputation, which I am convinced the Government is trying to do. There has been serious action on investigation. Deputy Michael McGrath and I wrote to the Garda Commissioner a couple of weeks ago to ask him for more resources for the Director of Corporate Enforcement. That has been done. We politicians must now step back from the investigation and let the investigators do their job. They must find the evidence and, if it is sufficient, charge the appropriate people and have them brought to court.

We have a different job. We must keep the money in the country and in the banks. The Minister for Finance has said he is concerned that money has left the banks. That was not helped last week by the flurry of scandal, rumour and speculation started by the Opposition that someone on these benches was involved in the alleged "golden circle". That was a disgraceful episode, devoid of evidence or purpose and it was no help in dealing with the difficult situation for the country and its job market. We legislators must get real and do our job and let the investigators do theirs.

The credit default swaps market has recently become a conversation point. This small group of international speculators who attempt to create a self-fulfilling prophecy in their speculation has replaced the currency speculation of the past from which we suffered. Action must be taken against these people at EU level. While it is probably necessary to have some sort of insurance schemes for them to have such a dramatic effect on our economy and our ability to borrow they must be called into question. It is surely immoral and wrong that someone could profit from that. Let us get on with the job, keep the country moving, get it working and keep the money here by getting the banking system back on track.

Darragh O'Brien (Dublin North, Fianna Fail)
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I am pleased to have the opportunity to speak in support of the Government amendment to the motion on our approach to the banking situation. The crisis is not specific to Ireland. This is a global financial crisis in which Ireland is affected by what happens abroad and in larger markets. It is incumbent on the Government to do all we can to protect our banking system and, most important, the wider economy.

I want to put to rest the accusation that Government measures, from the deposit guarantee scheme to the recapitalisation of AIB and Bank of Ireland, and the nationalisation of Anglo Irish Bank, have been bank bail-outs. Nothing could be further from the truth. This misinformation and spin from many in the media, and some members of the Opposition, does great disservice to the public and the country. More than 250,000 people work in the financial services sector. The viability and strength of the banking system and the financial services system are interlinked and it is crucial to ensure we retain and grow these jobs and this expertise. Without a viable and robust banking system all other areas of the economy are under threat. Government has been engaged not in a bail-out of the banks or bankers but in the protection of jobs, and of the country's ability to trade internally and internationally.

I welcome the Opposition's more measured comments this week. This issue is far above politics and should not be the plaything of party politics. It is incumbent on us all to ensure our comments are responsible and that we do not make statements that can damage the country's reputation. The recapitalisation of the two main banks to ensure they are robust is crucial to every job in the country. The main Opposition party's suggestion that we let Anglo Irish Bank go to the wall, thereby causing it to default on its foreign bond repayments, was wrong and only made for short-term political capital. If any Irish bank, including Anglo, defaulted on its debt repayments the consequences would have been catastrophic for the rest of the banking sector and for the country. We would not have been able to access funds on foreign markets for Exchequer borrowing or would have had to pay a high price for them. The Government is committed to investing in infrastructural projects under the national development plan by way of a stimulus package. If it does not access funds this cannot happen.

The Government's policy on stabilising the banks has been consistent and measured. Every step of the way decisions have been taken for the good of the citizens. Deposits have been protected for ordinary savers and outstanding loans will not be forgiven. The 8% yield on the coupon with AIB and Bank of Ireland is significant. This type of return on investment for the National Pension Reserve Fund could not be attained anywhere else on deposit markets. The continuing focus on liquidity and lines of credit for small businesses must continue and further funds will come in as part of this recapitalisation. We are changing the way the banks are managed, and investigations are under way.

I commend the Government on taking decisive and necessary action at a crucial time for the country and its businesses, foreign and indigenous.

Frank Fahey (Galway West, Fianna Fail)
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Fine Gael is playing party politics at a critical time for the economy. By engaging last week in baseless accusations, smear and innuendo, it sought to drag through the mud the good name of the Taoiseach and the Government. If it really had the national interest at heart, it would not seek to undermine measures we are taking at every opportunity for economic recovery. If they really had the national interest at heart, they would not seek to undermine at every opportunity the measures we are taking in the interests of economic recovery. They are determined to damage the name of Ireland as they pursue their own political agenda, regardless of the cost. Fine Gael is feeding the international frenzy to paint the country in the worst possible light.

At least four German newspapers have published negative stories about Ireland today. Fine Gael's refusal to put the national interest ahead of its own is damaging Ireland Inc. at home and abroad. Ireland's financial position is not an exceptional one in an international context. The main story in the German media today is the bail-out of the ailing HSH Nordbank by two German Länder by means of a capital injection of €3 billion and a guarantee of €10 billion. The media in Germany have been extremely critical of the decision, particularly the state oversight arrangements, which sounds familiar. The German media are also giving extensive coverage to the ongoing crisis at Opel, as the German car manufacturer tries to gain more autonomy from its US parent company, General Motors, and secure its financial future. Most German newspapers are reporting that the federal government has no plans to provide capital for Opel. A number of newspapers have reported on a further drop in confidence in the German business climate, to levels not seen since the 1980s.

Much of what is happening in Germany is similar to the problems we are experiencing in Ireland. Why is there so little about Germany in the Irish media at a time when Ireland is being heavily featured in the German media? Why are the Irish media saying so little about the major problems in the United Kingdom and the United States? Today's edition of the German newspaper, Frankfurter Allgemeine, contains headlines such as "The Tiger in Crisis". Die Welt reports that Ireland's difficult recession has forced Irish politics into crisis. The largest selling newspaper in Germany, Bild, has commented that if Berlin did not have enough problems with its economic and financial crisis, it may now have to assist other eurozone states.

Pat Rabbitte (Dublin South West, Labour)
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Deputy Fahey had a busy morning.

Leo Varadkar (Dublin West, Fine Gael)
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He had.

Frank Fahey (Galway West, Fianna Fail)
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The tone and style of the contributions made by Fine Gael and the Labour Party in the Dáil in recent weeks have contributed to such headlines. I can appreciate that Deputies Rabbitte and Varadkar take pleasure in the kind of negative approach evident in the House in the last two nights.

Pat Rabbitte (Dublin South West, Labour)
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The Deputy should take that back. I made no such comment.

Leo Varadkar (Dublin West, Fine Gael)
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Neither did I.

Frank Fahey (Galway West, Fianna Fail)
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On the issue of international confidence, it is worth noting that there are reasons to believe some UK-based foreign hedge funds are spreading false rumours about the state of the Irish economy. They are comparing Ireland to Iceland, for example, to try to force the sovereign default on which they have placed their bets. The approach of Fine Gael and the Labour Party is sustaining the hopes and aspirations of those involved with hedge funds who want to do Ireland Inc. down. When Opposition Deputies throw accusations across the floor of the House and seek to undermine every initiative the Government takes to get the economy back on track, they should bear in mind that the world is watching. All Members have a responsibility to perform their duties appropriately and carefully. The economic stability of the country and the prosperity of the people depend on this. The motion tabled by Fine Gael and the contributions made by its Deputies in the last two days represent a major mistake. The outcome of that approach will be reflected in the coming weeks. If, in the weeks to come, Deputies Varadkar and O'Donnell notice a slight improvement in the Government's performance in the polls, they will know why it is happening.

Timmy Dooley (Clare, Fianna Fail)
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I welcome the opportunity to contribute to this discussion. We have had a series of broad debates on the economy in the last few weeks. This debate relates particularly to the banking crisis. The country's banking system is in a seriously compromised state, as we all know. As Deputy Fahey and others have said, there is nothing particularly unique about this. Virtually all other EU member states are in the same position, largely, as are other countries throughout the world, including Japan and the United States. The wrongdoing that has taken place in this country is not unique and we are wrong to continue to focus on it. We need to try to work through it, to get to a point at which we can draw a line under it. If we start to re-energise ourselves, we can show some confidence in the banking system and the country as a whole. It is necessary to do this. We have to re-establish trust and confidence, nationally and internationally, in our banking system and country. Perhaps these debates will give us an opportunity to do this. However, we cannot do it alone. The first steps that need to be taken are evident in the involvement of the Office of Corporate Enforcement and the Financial Regulator. I accept what Deputy Rabbitte has said about the regulatory issue. We need to beef it up considerably if we are to give confidence to the wider community. Other Members have spoken about the procedures that need to be followed as we root out the wrongdoing that has been perpetrated. However, I will not labour the point. Where there has been wrongdoing, effective prosecution is needed to provide confidence nationally and internationally. We must demonstrate to everyone that wrongdoing has no place in Ireland and its financial system.

We must work with other EU member states to devise a robust regulatory regime. It should be constructed in a manner that takes account of the weaknesses being identified on a daily basis. In doing so, it is important to take cognisance of the decision taken by the country in last year's Lisbon treaty referendum. More than ever, we now realise that we can be isolated on the basis of decisions we have made, albeit in a democratic fashion. There is a price to be paid. I am concerned that our rejection of the Lisbon treaty is being used in certain other member states and by various hedge funds mentioned to suggest Ireland is in some way disjointed from the European Union, or is not part of the central system. We will need to work on this. The Union needs to standardise its approach to regulation. It will have to take a lead role at the G8 and G20 to bring about a robust Europe-wide regulatory system and a much wider system throughout the world. We can clearly see what happened in the United States. Some have argued that the lending practices permitted in Fannie Mae and Freddie Mac brought about an avalanche of distrust in the banking system. That has led us to where we are today. It has highlighted the fundamental weaknesses in various financial systems throughout the world. We are where we are and have to find a solution to the problem. We cannot be blamed individually or in isolation.

James Reilly (Dublin North, Fine Gael)
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No, we could not have that.

Timmy Dooley (Clare, Fianna Fail)
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Similarly, we will not find a solution individually or in isolation. It will have to be done in a collective way. I am sure we will receive co-operation when the political games are out of the way. I do not intend to repeat the points made in that respect. Naturally, the Opposition has a role to play. Its period of political point-scoring is coming to an end. We have to work together collectively to find an effective solution, in the best interests of the people we represent and the country we hold so dearly. As a nation, we are not best served by some elements of the political system. I am glad that is coming to an end. We cannot allow ourselves to undermine the pillars of our own democracy. Clearly, we are doing this by ignoring the facts. Most accept that the Government is absolutely committed to rooting out wrongdoing. The statutory agencies charged with various responsibilities have to be independent. We want them to be so. Continued town-square flogging will further undermine the credibility of the country. As Ireland is a First World player, it has to act as a First World player and present itself as a First World leader. If we ignore the statutory agencies and get involved in public-square flogging, we will show Ireland to be no more than a Third World country. Some would like to exploit this if they had an opportunity to do so.

Kieran O'Donnell (Limerick East, Fine Gael)
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I propose to share time with Deputies Varadkar, Reilly, O'Mahony, Breen and Clune.

Brendan Howlin (Wexford, Labour)
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Is that agreed? Agreed.

Kieran O'Donnell (Limerick East, Fine Gael)
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Far from playing politics, Fine Gael has taken a position. Ireland is probably experiencing its most difficult financial, economic and political problem in our lifetime. The problem is that the Government is engaging in paralysis. We are getting only soundbites and no action.

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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Will the Deputy look at what we are doing?

Brendan Howlin (Wexford, Labour)
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Allow the Deputy to make his contribution.

Kieran O'Donnell (Limerick East, Fine Gael)
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We have yet to see a five-year plan for the economy. There were discussions with the social partners for a number of months, yet the Government produced the document on pensions at the very last minute. That is no way to run a Government.

Darragh O'Brien (Dublin North, Fianna Fail)
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You did not want us to engage with the social partners at all.

Brendan Howlin (Wexford, Labour)
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The Deputy should speak through the Chair.

Kieran O'Donnell (Limerick East, Fine Gael)
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The purpose of our motion is to get the banking and regulatory systems on a proper footing. A couple of things have disturbed me this evening. I see that Bank of Ireland has appointed Mr. Richie Boucher as its CEO, which is an internal appointment. We do not know of any cap on his salary. We propose external appointments, which do not send out the wrong signal, although this is nothing personal against Mr. Boucher. It would appear to international markets that we are putting people into the top tiers of the banks who were involved in the situation as it developed. That sends out the wrong signal. The Minister for Finance needs to clarify that point. Taxpayers' money has been spent on the guarantee scheme and €3.5 billion is going into the recapitalisation of the Bank of Ireland. That is all we know at the moment.

Darragh O'Brien (Dublin North, Fianna Fail)
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It is at the rate of 8% per annum.

Kieran O'Donnell (Limerick East, Fine Gael)
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If the 8% cannot be paid, it can be rolled into ordinary shares. Once again, the Deputy is playing with the facts.

It has been disclosed this evening that the Financial Regulator is assisting the Garda Síochána in its investigations and certain matters involving Anglo Irish Bank have been referred by the regulator to the Garda. This is now in the public domain. If these matters are being referred to the Garda today, why were they not referred to the force a few weeks ago? Why has it come to the situation that these matters are being referred now that the Garda has been brought in? What matters were referred? Have these disclosures arisen on foot of contact made between the Financial Regulator and the Garda?

Darragh O'Brien (Dublin North, Fianna Fail)
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Has the Deputy anything against the Financial Regulator?

Kieran O'Donnell (Limerick East, Fine Gael)
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No.

Brendan Howlin (Wexford, Labour)
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Deputy O'Brien, nobody interrupted you and you were allowed to make your contribution. Please allow others to do the same.

Kieran O'Donnell (Limerick East, Fine Gael)
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We want transparency and we want accountability. These are questions that need to be answered by the Minister.

In all the contributions made by Fianna Fáil Deputies tonight, I did not hear one mention of the taxpayer. This is fundamentally about protecting taxpayers' money. We want the banking system to be fluid and functional, because the key feature in this recapitalisation scheme is about getting funds flowing to small businesses and to mortgage holders. Neither of these things has occurred. This is not about bailing out the banks.

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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Recapitalisation has not occurred yet.

Kieran O'Donnell (Limerick East, Fine Gael)
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The guarantee scheme was supposed to provide funds to small businesses and to mortgage holders.

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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It was not.

Kieran O'Donnell (Limerick East, Fine Gael)
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That is what was put forward.

Brendan Howlin (Wexford, Labour)
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I ask the Minister of State to allow the Deputy make his contribution.

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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He is factually inaccurate.

Kieran O'Donnell (Limerick East, Fine Gael)
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When the Minister of State checks the facts out, he will find that they are accurate. This is not about bailing out the banks, or keeping bankers in salaries or re-appointing people who created the problem. However, on both occasions that is what has happened in the banking sector. How can the Government expect the public to have trust?

We have made a very straightforward proposal. If the proper regulatory system is not in place, the international markets will not have trust in our banking system. We propose that the board and management of the Financial Regulator step down, to be replaced by a new management and board. That would send out a strong statement from the Government that it means business.

Apart from the financial regulation system, one of the key features is that operators from the international markets are looking at the state of our public finances and this has an important bearing on our banking sector. The Government needs to bring in a new budget. It needs to bring a proper economic plan before the House. It needs to bring in proper measures in the areas of job retention and job creation. We brought forward a proposal — well received by the business community — to grant an exemption to employers' PRSI for two years. I hope we hear practical suggestions at the Fianna Fáil Ard-Fheis at the weekend, which can be followed up with job creation.

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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The Deputy is more than welcome to attend.

Kieran O'Donnell (Limerick East, Fine Gael)
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I have not got any invitation yet.

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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Consider it granted.

Leo Varadkar (Dublin West, Fine Gael)
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I will come too, if the Minister of State gives me an invite.

Kieran O'Donnell (Limerick East, Fine Gael)
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Energy prices need to be brought down. The Minister for Communications, Energy and Natural Resources is not dealing with the issue. He could move in tomorrow morning and show that the regulator allowed the ESB to reduce its costs.

We have put forward practical measures. We have called on the board and the management of the Financial Regulator to be replaced. We have called for a cap on salaries for top officials, yet tonight we see that Mr. Richie Boucher has been appointed as CEO of Bank of Ireland, while we have no details——

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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This was reported last week.

Brendan Howlin (Wexford, Labour)
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I will ask the Minister of State to leave the House if he continues to interrupt.

Kieran O'Donnell (Limerick East, Fine Gael)
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The Minister needs to come into the House to tell us how much Mr. Boucher is being paid. He needs to tell us if the Government is happy with his appointment, considering he was involved in the bank and created the problems.

I commend the motion to the House, and I hope we get support from the Fianna Fáil Deputies who proclaim to have such an interest in restoring the banking system.

James Reilly (Dublin North, Fine Gael)
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A Leas-Cheann Comhairle, you will have to stop Mutt and Jeff interrupting all the time.

Jimmy Devins (Sligo-North Leitrim, Fianna Fail)
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Deputy Reilly is hilarious.

Leo Varadkar (Dublin West, Fine Gael)
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I commend Deputy Bruton and Deputy O'Donnell for bringing this motion before the House. There can be no doubt that the Government has mishandled this banking crisis. It might have been in spite of its best efforts, but there is no question that it has been mishandled.

When this crisis first broke late last year, the Government denied that there was any problem with the banks and claimed there was no need to guarantee deposits. The banks then got the Government guarantee, which happened late at night. We came into this House and we did not get the Bill until ten minutes before it was debated. We were told that the problems in the banks were just a liquidity crisis, and that there was no capital crisis at all. It was just a minor liquidity problem because the international credit markets were seized up and there was no underlying problem in the Irish banks. We know now that this was untrue. It is probably the case that we were being told untruths by senior Ministers at that stage.

Brendan Howlin (Wexford, Labour)
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The Deputy should not allege untruths.

Leo Varadkar (Dublin West, Fine Gael)
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I will withdraw that. We were told things that turned out subsequently not to be true. Subsequent to the guarantee scheme, the Government refused to accept that recapitalisation was needed. The Government then brought forward its initial recapitalisation plan which included proposals to provide €1.5 billion in funds to Anglo Irish Bank for recapitalisation. That announced plan did not work and was then abandoned. In recent weeks, Anglo Irish Bank was nationalised and another recapitalisation plan for AIB and Bank of Ireland was announced, giving each of them €3.5 billion. If anybody has a reason to lose confidence in Ireland and its banking policies, it is not due to anything said by the Labour Party or by the Fine Gael Party, but due to the hames the Government has made in managing this crisis. It changes every week, and I predict that it will change again. I do not think that the recapitalisation plan will go ahead. It is likely that more radical measures will be taken in the next few weeks on AIB and Bank of Ireland, and the Government will abandon its banking policy yet again. That is why people have lost confidence in the Government's ability to manage this crisis.

Deputy Byrne referred to allegations made by Fine Gael Members last week. I was not involved in any debates last week, and I certainly did not make any allegations, but I know to what he is referring when he talks about smears and innuendo. Four of the ten names are in the public domain and anybody who knows anything about those four people will know of their very strong personal, financial and other links to Fianna Fáil. It is incorrect to pretend the names in the public domain are not part of the Fianna Fáil family. They are, and we need to be honest about that. For anybody who wishes to see it, there are plenty of e-mails circulating this city laden with information outlining the connections between the maple ten and Fianna Fáil. There is also plenty of photographic evidence to show how comfortable Fianna Fáil has been in the presence of these people.

It is reasonable to examine the connections between Fianna Fáil and the banking sector over recent years. There was former Taoiseach Charles Haughey's relationship with the banks. Fianna Fáil's director of elections moved seamlessly from being head of the Irish Banking Federation to being Fianna Fáil director of elections and back to the Irish Banking Federation. Fianna Fáil cannot pretend no relationship exists there. The Government has consistently refused to properly resource the Office of the Director of Corporate Enforcement. The Government had plenty of money to establish robust agencies and to throw around at any project one could imagine, yet it consistently starved the Office of the Director of Corporate Enforcement of resources. That is because the Government is soft on corporate crime and, on a number of occasions, potentially complicit in it. The Government ensured a Financial Regulator was appointed who was not up to the job, despite the protests of the then PD Tánaiste. The Department of Finance said Mr. Sean FitzPatrick committed no crime, and the Government establishment a revolving door system whereby people who have destroyed their own banks are appointed to the board of Anglo Irish Bank and the Financial Regulator.

There can be no confidence in the Government's policies. Regime change is needed. We need the senior executives and the boards of the banks removed and replaced. We need the Central Bank and the Financial Regulator replaced. Crucially, we need to establish a bad bank to store those toxic loans so we can have proper functioning banks again. If we do not do that, we are going into the Japanese model and will have zombie banks for a decade.

James Reilly (Dublin North, Fine Gael)
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I congratulate my colleague, Deputy Bruton, on bringing this motion to the House and I thank him for this opportunity to address the House. When I last spoke on the financial situation in this House I said it was the greatest financial crisis facing our State since its foundation, and it is clear to everybody that it was no exaggeration. We have nationalised Anglo Irish Bank, despite the fact that we did so with one hand tied behind our backs and half blind to most of the facts, which are slowly coming out. We are losing 40,000 jobs per month at a cost of €1 billion to the Exchequer, we have put a further €7 billion into Allied Irish Bank and Bank of Ireland and our reputation internationally is in shreds.

We now know how we got to this sad and sorry point. We got here because of an incompetent Government led by a Taoiseach who was full of bluster, was asleep at the wheel when he was Minister for Finance and allowed all those behind him to fall into a stupor, including his regulators. The nod-and-wink cronyism which has been at the centre of this Government for the last 20 years, bar two, is the ethos that has led us to where we are today. This morning the Taoiseach told the Dáil that last year the HSE made great savings of €280 million. He neglected to say the number of people lying on trolleys is as great as it was when it was considered a national emergency and that we have had a 30% increase in waiting times on the waiting lists and a 10% increase in cancelled operations. Well done to the HSE for budget balancing that hits patient safety and needs, but shows no sign of the redundancies of which the Minister for Health and Children spoke last year, which she now tells us are a matter for the Minister for Finance. How is that for progress after a year of talking about it? More plans for the future are being substituted for real action today.

The Taoiseach gives the impression that his Government has a sense of urgency about our financial irregularities, but here is the reality. A year ago it knew about share transactions involving the golden circle trying to prop up the Anglo Irish Bank share price and manipulate the market. In October it knew about the transaction between Irish Life & Permanent and Anglo Irish Bank but sent in the fraud squad only yesterday because of public opprobrium and outcry. Up to this point this Taoiseach and his Government were happy with the three monkeys approach: hear no evil, see no evil and, above all, speak no evil. We all know how effective the Government is at looking where there is nothing to be found. We need only remember the Minister, Deputy Dermot Ahern, looking up every tree in north Dublin.

Owing to the short time I have been here I cannot outline Fine Gael's plan for recovery as Deputy Bruton did so eloquently yesterday other than to say Ireland Inc. internationally has a stink. That smell will not be lifted until all those responsible for it are cleared out. That means the regulators who have failed us so miserably, the bankers, who with their cosy cartel and boards of directors have cleaned us out, Government agencies such as FÁS which have misspent our money and, most of all, this Government because it has been embedded at the centre of this for the past 12 years. This Government's public service levy has served only to divide our community between public and private sector workers and is a blunt instrument that hurts many people. We need strong leadership that unites, not divides, our people.

We need a new Government with a clear mandate from the people based on transparency, accountability and fairness. All information should be laid out for all to see. There should be no more of this drip-feed and news management that has been so typical of this Government. It is no wonder the HSE alone spent €51 million on spin doctors instead of patient services. We all remember when Transport 21 was behind schedule the Government's decision was to spend another couple of million euro explaining to the people why that was so instead of getting on with the job.

A new Government should bring accountability. All those guilty of misdemeanours in the financial sector need to be brought to book, charged and dealt with by the law. Those found guilty should be punished and hurt where they feel it most, not just with jail but in their pockets. They should not be allowed to walk away with large pensions. The vast majority of people working in our banking service are hard-working, honest people and they are also victims of this sharp practice.

A new Government should be based on fairness, so we can all join in this together to seek to bring our country back to its rightful place where it can deliver health, wealth and education for all, where everybody shares the pain and, most importantly, when the turnaround comes, as it surely will, everybody shares the gain, not just the elite. I commend the motion to the House.

John O'Mahony (Mayo, Fine Gael)
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I am glad of the opportunity to make a contribution to this Private Members' motion on the unfair, reactive rather than proactive and indecisive way this Government has dealt with the economic crisis that has befallen this country. I commend Deputy Bruton on bringing the motion before the House and for the consistent approach he has taken during good times and bad, always being constructive in his analysis. Only in recent times do people really appreciate how well he was aware of the warning signals in our economy when the Government continued to be in denial.

A number of key issues have been at play over the last number of weeks for people on the streets of this country when the financial crisis stares them in the face when they get out of bed, if they are lucky enough to have a job to go to. They look to our Government and bankers for the leadership and action to deal with the issues in a proactive and competent manner. If this had happened it would have sent out a signal that would have given confidence across the board. If the actions taken are seen to have a positive effect and be fair, the confidence that brings becomes part of the solution. There is a self-fulfilling prophecy that whether we think we can or cannot, we are right. If that action is not taken, and if nobody seems to be taking responsibility or is made accountable for the irresponsible behaviour that has led us to where we are, people lose confidence and get angry.

People are crying out to be constructive if they see fair and firm remedies being implemented. This motion is an attempt to bring that fairness and equity to the pension levy proposals and to make people accountable for the mismanagement and lack of regulation in the Irish banking system. Regarding the unfairness of the pension levy, we were told since these proposals were introduced that they would or could be tweaked as they were debated and brought through this House. We have seen no evidence of that. By the introduction of this levy the Government will encourage people on low incomes to give up their jobs and go on social welfare and encourage people who are near full service to retire to avoid the levy. The latter effect on the Garda could have major knock-on effects where there are many retirements at one end, of which I am hearing in my constituency, with the slowing down of recruitment at the other end.

Another effect of the crisis and how it is being dealt with is that the Government has set the public and private sector workers at each other's throats. In that kind of war there will be no winners. The Taoiseach and the Minister for Finance have consistently come into this House and asked for a unified approach to deal with the problems, and yet the measures the Minister introduces will do anything but that. Where is the fairness in 17,000 farmers getting letters from their bank managers about the money they owe but not being able to get the grants they were pledged many months ago? Small businesses and employers cannot get credit facilities from the banks to keep their doors open or to stay in business. It brings to mind the saying, "Nero fiddled while Rome burned."

When we have an unprecedented crisis people need to be told the truth. I firmly believe that if they were in possession of the facts they would rise to the occasion and if that burden was seen to be spread in an equitable and fair manner, then the Irish public would not be found wanting. I commend the motion to the House.

Pat Breen (Clare, Fine Gael)
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I welcome the opportunity to contribute to the debate tonight. Like my colleagues, I congratulate Deputy Bruton on bringing this motion before the House. Confidence needs to be restored to the banking system and the only way to do this, as Deputy Bruton stated last night, is by way of a comprehensive clean out in management of banks. We all saw the pictures on television last night of gardaí raiding Anglo Irish Bank. It is a little late, like closing the stable door when the horse has bolted. Permanent damage has already been done to the image of our banking system worldwide and it is no surprise that the international community has lost confidence also. The crisis in Anglo Irish Bank exposes the failure of the financial regulatory system to protect the consumer and the taxpayer.

The level of exposure to bad debt is now a considerable concern. According to last Sunday's edition of The Sunday Times, 20 unnamed customers owe the bank a total of €11.4 billion, representing more than 25% of its total Irish loan book, while in Britain the top 20 customers account for 46% of the loan book. The PWC report published last week also described substantial exposure. The crisis in our banking system exposes the cronyism between developers and the Government which has destroyed our reputation and brought this country to its knees, and all those bankers who caused this are leaving with golden handshakes. It is grotesque, unbelievable, bizarre and unprecedented — words from the past. Is it any wonder there is such anger? We have not witnessed such anger in protests on the streets of Ireland since the 1970s. While all are willing to pay their fair share they want the same standards to apply to all, fairness and equality.

Tonight the Government will force through the pensions levy while Fine Gael opposes it because it is unfair. It penalises the lower paid State employees. Unlike the income levy, for instance, there is no provision to protect those on low pay who do not receive any tax relief on it nor any pension benefits in excess of the State contributory pension.

While the Government stumbles from plan to plan every sector of our economy is struggling. Look at what is happening in the HSE, which faces a €1 billion budgetary deficit for 2009. I understand that the HSE is considering the closure of a number of hospitals — four to 12. Tomorrow I will ask the Tánaiste whether the HSE will close Ennis General Hospital because some people have stated that it has been discussed at a meeting. I am on record as stating that the HSE will use the HIQA report on the misdiagnosis at Ennis General Hospital to further downgrade and close the hospital. I am not scaremongering and I want clarity on this tomorrow.

Returning to the banking crisis, it is quite clear that the lessons of the Ansbacher debacle have not been learned. Questions arose then on the effectiveness of our financial regulatory systems and it is vital that we put faith in and re-establish our banking institutions. Nobody wants to see our banks destabilised because of the actions of a few. We need to restore our international credibility because billions of euro have poured out of the country in recent weeks.

I found the following quote from the great car maker Henry Ford the other night as I was researching this: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." The people of Ireland are now only too familiar with our banking system. They are the victims of the system. It is time for the Minister for Finance to answer his own call to patriotic duty. I would appeal to the House to support the Fine Gael motion and help rebuild the Irish banking system.

Deirdre Clune (Cork South Central, Fine Gael)
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Not until such time as we get our banking system right will our economy begin to recover. We need to get to the bottom of the problems in the banking systems and then we can move forward. Nobody believes that we have got to that stage. We need only look at the share prices of our two main banks. It is quite evident that there is no international confidence whatsoever in the banking system in this country. It appears the €7 billion is not doing the trick. The redacted version of the PricewaterhouseCooper report that was produced last week certainly gave us an insight into the level of difficulties and the high levels of exposure in our banks, but we need to see that report printed in full and to know the exact state of our banks and the level of exposure they face.

The motion concentrates on the banks and the regulatory system which has failed in its primary function to monitor the banks. The people are crying out for reform. We saw it on the streets of Dublin last weekend. Initially the protest centred on the unfair pension levy but there were people present who want to see our banks back functioning. The primary function of a bank is to lend on the basis of its deposits and we have not seen this in our banks for quite some time. Many of them have been acting as property developers and have lost the run of themselves.

We want an end to the piecemeal approach from the Government so far. It started out with the bank guarantee scheme in September last, and then there was the nationalisation of Anglo Irish Bank and the recapitalisation programme. At this stage we want to see the bottom line. Exactly what is the level of debt? It is quite obvious that the efforts of the Government so far have done nothing to ensure international confidence in this country.

The people want to see an end to the excessively obscene salaries, bonuses, payments and golden handshakes to senior bank executives and those sitting on boards of these banks. We now own one bank and we may have to invest further in other banks. The Minister, in his response to the motion, refers to another committee that he has set up to look at remuneration of bank executives. Why does he not just do it? It is within his power. The Executive has leverage in terms of the commitments that have been given to those banks and the people want to see an end to the excessive moneys that have been taken in remuneration from these banks. Yesterday we saw the fraud squad move into Anglo Irish Bank. The optics were great but, as has been stated here tonight, I wonder if it was not too late.

I reiterate my support for this motion. We need to see action in this area. We need to get to the bottom of what is happening in our banks. Unless the banks are functioning properly then the economy will not begin to recover, finance will not be available to small viable businesses up and down this country which are being strangled and cannot function and which are being denied funds to get them over this difficult period. I commend the motion and look forward to Government support for it tonight.

James Reilly (Dublin North, Fine Gael)
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May I make a point of clarification?

Brendan Howlin (Wexford, Labour)
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There is no such thing. I take it Deputy Reilly wishes to make a point of order.

James Reilly (Dublin North, Fine Gael)
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On a point of order, I wish to clarify for the record of the House that I may have stated a 30% increase in waiting times whereas I meant a 30% increase in delayed discharges.

Brendan Howlin (Wexford, Labour)
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I am sure that will be noted.

Peter Power (Limerick East, Fianna Fail)
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I commend the Government's amendment to the House.

We in Ireland, like all countries in the developed world, are confronting the greatest financial economic crisis that the developed world has seen for well over 100 years. Before we can solve the crisis, which is what this motion seeks to do, we must look at its essential characteristics. What are they? The defining characteristic of this financial crisis and recession as distinct from those that have gone before it is its unpredictability. The nature of this crisis is changing all the time, almost on a weekly basis. From the moment the American Government let Lehman Brothers go last year, it has been impossible to predict where the crisis is going.

The perceived wisdom 12 months ago was that a 4% capital base ratio for our banks was sufficient. We now know that was incorrect, even though it was predictable at the time. The ratio is now estimated to be 9% and we have recapitalised the banks to that extent. What will it be in five months' or nine months' time? No one can predict that. Only in recent days President Obama signalled further massive underpinning of the American financial system, where this crisis began. Accordingly, because the situation is so fluid and is changing daily, the reactions must be also on a daily basis.

There is one constant in all of this. Since last September when the Government had to intervene, with the support of the proposers of this motion, Fine Gael, the decisions that have been made have been in the national interest. Recent events have shown that the Government has not been influenced by golden circles or the malign forces that have been suggested within this very Chamber. Suggestions to that effect were made not alone without evidence or foundation but with a complete reckless disregard to the financial status and reputation of the country and its ability to raise finance in the capital markets. That is why those who speak about the crisis must do so in a measured tone. The Government's approach to this crisis has been measured and decisive at each and every unpredictable turn in events. The approach has been structured.

Charles Flanagan (Laois-Offaly, Fine Gael)
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It has been slow and lazy.

Peter Power (Limerick East, Fianna Fail)
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No, it has been structured and considered. We had to act quickly in one instance in September and have acted in a measured way since in terms of the recapitalisation of the banks. Since we signalled recapitalisation as a policy, we could have gone for an immediate recapitalisation but instead we did a risk assessment of the loan books, which caused enormous controversy in Anglo Irish Bank, but we took a measured tone and recapitalised. At the same time, we came to an informed decision of the appreciated risk in the banks and that is why the PricewaterhouseCoopers report was commissioned, giving rise to the controversy of the past few weeks.

In that controversy we should remember one thing. Despite all of the difficulties of the two main banks and the bad decisions which their chief executives admit, there is no suggestion or allegation of wrongdoing against the two most important systemic financial institutions in the country. We must recognise that.

Leo Varadkar (Dublin West, Fine Gael)
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Reckless lending is wrongdoing. Giving out 110% mortgages is wrongdoing.

Simon Coveney (Cork South Central, Fine Gael)
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It is dishonest.

Peter Power (Limerick East, Fianna Fail)
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I accept that, but there has been no suggestion of corporate wrongdoing in those banks and we must support them notwithstanding the mistakes they have made. That is the Government's position; it is a measured, timely, proportionate and decisive position and I commend the counter motion to the House.

Charles Flanagan (Laois-Offaly, Fine Gael)
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I commend Deputy Bruton on bringing this important motion to the House. The Government now admits that Ireland is in a fight for its economic survival. If we are to come through this and survive, we must have a clear understanding of how and why we got into the mess in the first instance.

The banking and financial crisis in Ireland was not caused by sub-prime lending in the residential mortgage market, although a small amount of that did go on, and it was not caused by the creation of, or purchase of, exotic financial instruments by the Irish banks. The economic crisis in this country was caused by a particular political way of thinking. The Fianna Fáil-Progressive Democrat ideology has brought this country to its knees. This was the Galway tent school of economics.

Central to this ideology was the belief we could build a sustainable economic future on the back of an unsustainable property bubble. At the core of this Galway tent school of economics was a cosy cartel of politicians, property developers and bankers, supported by a raft of tax incentives and tax dodges. Its core principle was the pursuit of private gain at the expense of the common good. Charlie McCreevy was the cheer leader, promoter and high priest of this neo-liberal ideology. Its true nature was expressed in his infamous words "if you have it, spend it". Spend it they did. The badge of honour was the private helicopter, flying between the Galway tent and the Fianna Fáil Ard-Fheis.

Encouraged, supported and cheered on by the Government, property developers and bankers went on an orgy of speculation, borrowing, lending and indefensible practices. The banks became the property of the speculators through special investment vehicles that were kept off the balance sheets. A further risk was added when many senior bankers themselves became property speculators and developers in their own right, in addition to the day job. Any sense that there was a conflict of interest was abandoned.

The actions of the Director of Corporate Enforcement yesterday are welcome, as are those of the Garda Síochána, but yesterday's show must be more than cosmetic. The Office of the Director of Corporate Enforcement must be properly resourced and beefed up, the legislation in that regard must be changed.

There is overwhelming prima facie evidence of serious wrongdoing that should be addressed not only by the Director of Corporate Enforcement but the Director of Public Prosecutions. I refer to section 17 of the Companies Act 1990, which lays out directors' obligations, section 41, which deals with the prohibition of loans to directors, sections 42, 46 and 53 laying out the obligations of directors to notify their interest in shares, not to mention sections 197, 202 to 204, inclusive, and 242. I could go on.

As well as 11 breaches of company law, I contend serious criminal fraud has been perpetrated and should be processed. The Criminal Justice (Fraud Offences and Theft) Act 2001 must be applied in full, with particular reference to sections 10 and 11 thereof. The market abuse regulations must be applied and honoured in full. Our money laundering and financial regulation procedures must be strengthened. The failure to transpose the third EU directive on money laundering into Irish law is a dereliction of duty on the part of the Government.

The boards of directors of all our banks have failed in their fundamental obligation to supervise their managers. This was starkly exposed in the dodgy money transfers between Anglo Irish Bank and the Irish Life & Permanent. The chairperson of Irish Life & Permanent, paid more than €400,000 annually to do her job, has admitted she did not know of financial transactions at her bank of more than €7 billion. She was not informed, she did not know and she still does not have the decency to resign.

Where was the regulator when this toxic stew was bubbling away? The system of banking regulation and supervision is the creation of this Government. A light touch approach to regulation was supported and actively encouraged by senior members of the current Government and its predecessors in the Fianna Fáil-Progressive Democrat neo-liberal regime. Charlie McCreevy boasted on numerous occasions about the lack of regulation and has been preaching the same dangerous gospel in Europe for the past four years.

Despite corruption cases involving companies based in the IFSC, neither the Government nor the regulator took any action. Justin O'Brien, an international expert on corporate governance, warned the Government about this issue. He wrote in The Irish Times that international regulators were expressing "shock and dismay" that Ireland had abdicated its responsibilities for short-term advantages but no one on the Government side was listening.

Despite the high profile court cases, despite the loss of reputation and despite the warning signs, the Government sailed on regardless. In September 2005, Deputy Micheál Martin, the then Minister for Enterprise, Trade and Employment, assured his audience at the annual IFSC lunch that he was further weakening the already lax regulations in this area and that the law in this regard would be further eased. He said he would be less prescriptive about the methods a company uses to review its compliance procedures and in not requiring a review of the compliance statement by external auditors. Of course, the rod of lax regulation as applied to companies based at the IFSC was also applied to general banking, with the disastrous consequences we now see. There is an urgent and compelling case for a root and branch reform of our financial regulatory system. There is a need for some outsiders who have no baggage, who will apply the rules without fear or favour. I recommend the Minister to look at Sweden or Canada as a source of such expertise.

There needs to be a phased clear-out of senior managers at board level in all our banks. Likewise, there needs to be a clear-out of the board and senior executives in the offices of the Financial Services Regulator. Confidence must be restored and time is of the essence. We need to rid ourselves of the three "Cs" in banking: cronyism, corruption and criminality. If this Government is unable or unwilling to do the job that now needs to be done, it should stand aside and let others take over.

I commend Deputy Bruton for his foresight in this regard, not only in recent times but also for issuing warning signs and ringing alarm bells. If this motion is defeated, and the indication from the Minister of State opposite is that it will be, that will not end the debate. We need resolve on all sides of the House to deal with this banking issue before moving on to deal with the general economic crisis we now face.

Richard Bruton (Dublin North Central, Fine Gael)
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I wish to thank all of those who contributed to this important and timely debate. Since this motion was tabled there has been a growing realisation that we are fighting for our economic independence. I wish the Government well in confronting the economic and banking problems. However, wishing it well does not mean that I must suspend my critical faculties and pretend, as the Taoiseach and many Ministers do, that we should somehow suspend criticism and speak no ill of Government policy because it is perfect. That is not the reality. The Government should wake up to the fact that it was not pursuing sustainable policies and neither did some storm come from abroad to blow it off course. The Government was pursuing unsustainable, reckless, foolish and wasteful policies. That is the reality.

People on the Government side of the House must realise that unless we face the failures that have grown up over the last seven years, we will neither confront our banking crisis nor our economic one. The economic crisis is at the core of the problem with banking. If there was confidence in Ireland Inc and the way in which the Government is managing the public finances we would not have problems in our banking system and we could withstand the pressures. We hear that people are moving their deposits or are at risk of doing so because they no longer have confidence that the Government has a grip on economic strategy. It is not just the Opposition that feels that. Respectable opinion on all sides, including unions and employers, is of the view that the Government has not grasped the scale of the challenge and has not put in place the sort of comprehensive strategy so that people will understand the crisis is real and must be confronted on a broad basis. That is what is missing because there is no such public conviction. If people at home and abroad do not believe it, then we are damaged and must correct that position.

We cannot, as the Government seems to wish, blame the Opposition for asking probing questions. It is not the Opposition's fault that misdemeanours were ignored, that when evidence was presented its implications were not understood, that Ministers did not read reports presented to them, or that regulators did not act on information in their possession. We are in this mess because probing questions were not asked in the past. People on the Government side of the House may feel uncomfortable when probing questions are being asked, but that is the duty of Opposition and proper regulation. There was a failure to ask those probing questions, however. A culture of Government grew up that was content to circle the wagons. It was a cosy arrangement whereby things were passed on a nod and wink. Reform was not faced up to and when problems arose they were bought out. The culture that grew up in the last seven years fathered the problems we now face. Until this House confronts those failures and begins a reform programme we will have failed to address the banking and economic crises.

Fine Gael's motion contains clear propositions, including a total regulatory clear-out. Who on the Government side can say they have confidence in the way the regulatory system performed? Yet there has been only one token head which was given a golden handshake and moved on. That is not confronting regulatory failure. Let us be honest. We need a clean sweep to bring in a proper quality-mark with an international reputation that will be attached to our regulatory system. That is what we are seeking in this motion. We need proper disclosure so we will know what we are putting our money into. That has not been forthcoming, however, either from the banks or the Government which is in possession of some evaluation of those problems.

We also need a clear-out within the banks themselves. We need a new banking culture with changes in the sort of people who lead banks, including the values to which they aspire. It is just not good enough to exchange Tweedledum for Tweedledee and pretend that things have changed. We need to see that sense of change within the banking system and that has yet to come. Hopefully it will come but if so, it is coming very slowly.

As taxpayers we are now standing in the breach. We have provided guarantees to the sum of over €400 billion. We are proposing to put €7 billion of taxpayers' money into the banks. I would seem that we are proposing to go further and offer an insurance to underpin some of the toxic loans. At this stage we are knee deep into the banks but the only way in which our commitment to the banks will succeed is if people believe that the guarantee offered by the Government is worth the paper it is written on. The Minister must face up to the crisis in the public finances in a broader fashion than he has done to date if he wants to give that signal of confidence at home and abroad. He needs to go beyond where he is.

The notion that the October budget served the country's interests in any way has now been blown out of the water. It was an inept budget whose timing was wrong and it failed to face up to the challenges. The Minister is now trying to retrofit changes to it, but that is not good enough. We need to see a proper reform programme in the public finances, not outsourcing to Mr. McCarthy or the Taxation Commission, but signalling the Government's views as to how we will move forward in areas such as taxation, economic renewal and public spending. We need decisions this year, not some time in 2010.

Many people have spoken of politics needing to be renewed in the face of this crisis, and I agree. We have put up with archaic procedures in this House that are not fit for purpose. We have engaged in sham debate that does not countenance the real challenges we face as a country. We have ceased to be a forum where conflicts of interest are resolved. We have allowed that to slip gradually out of our hands. We have been elected by ordinary people around the country to take responsibility for these decisions. We cannot make those decisions by consensus, however, and anyone who believes we can do so in this crisis is fooling themselves. We need a Government that will act decisively and with authority. We need an Opposition that will ruthlessly hold the Government to account and scrutinise its decisions. We need a Dáil that holds to account monopoly power in Government, in banking and everywhere else.

We need to reform the way the House works if that is to happen. No commitment yet, however, has been made in that regard. The most vital Bills, such as that dealing with the nationalisation of Anglo Irish bank, are passed on guillotine motions with no single section considered in full. How does the Minister for Finance see this fitting in with a modern parliamentary democracy playing a meaningful role in the way decisions are made? Politics needs to be reformed. While we are in this economic crisis together we need to have a working parliament that confronts these problems. Under Deputy Cowen's tenure as Taoiseach, this has not been the case, however. Since the House returned after Christmas, there has been no open, honourable or sensible debate about our economic problems. That is what is damaging politics today.

Deputies:

Hear, hear.