John Gerard Hanafin (Fianna Fail)

I welcome the Minister of State to the House. I was proud of the manner in which Deputy Brian Lenihan acted so quickly as Minister for Finance to deal with what was an emerging major difficulty. This was not the first time he has done so. His first act as Minister was to ensure that the €100,000 limit was extended to all account holders with the Irish banks. His second act took place last night when he underpinned the Irish banks' financial security and in so doing, underpinned the Irish economy.

Fianna Fáil has claimed successes in the past and in response, the Opposition often has ascribed to external factors the causes of the benefits accrued. That being the case, the present problems have been visited upon us by what happened in respect of sub-prime lending in America, particularly when one considers the abuse of the system by senior financial houses in the United States. Many of the questions that have arisen today pertained to what will be done regarding the pay of bankers and the highly paid staff. What will be done in respect of the bonuses that were paid to people who sold on assets and securities that clearly were not worth what they stated? The assets and securities in question amounted to trillions of dollars and have affected the world's financial security. It is as simple as that.

I occasionally receive an offer from Nigeria that is extremely hard to resist. The offer is that if I provide my account number, untold sums of millions, which are held up somewhere at present, will be deposited within my account. While I have not handed over my bank account details, had I so done I still would have lost less than these people who work in international financial services without accountability or proper regulation. These are the people against whom the Minister rightly acted to protect the economy. I refer to a catastrophic fall of 7% on Wall Street, the highest ever. However, the Irish stock market, which reflects confidence, had rebounded by 7% by 4 p.m. today. The Minister made the right choice. It is time for accountability for those who sold the aforementioned ninja mortgages, that is, mortgages to people with no income, no job and no assets because white collar crime is not victimless and jobs will be, and are being lost. Moreover, confidence and financial security also are being lost.

This is not the first time we have been obliged to bail out a bank in Ireland. I suggest that rather than bailing out the banks, they are being underpinned and people are being provided with a guarantee. In fairness to the Irish banks, none of the sub-prime difficulties that have caused this crisis have been experienced here. I mentioned 100% mortgages, which clearly were wrong, at a meeting of the Joint Committee on Finance and the Public Service. However, it was pointed out correctly that they represent only 5% of the total Irish mortgage book. The Minister received advice last night from both the governor of the Central Bank and the Financial Regulator that the correct action to take was that which he subsequently took to underpin the Irish financial markets and one can only state he did the right thing.

The Minister will make his Budget Statement next month. I am also certain that no matter how difficult that budget may be, the less well-off will be protected. I am also confident those in the greatest need will find targeted supports in that budget, which is a consideration today.

I suggest that in the forthcoming budget it is time to take a break from putting the 1% away for a rainy day. I support my colleague, Senator MacSharry, in stating we should look to use that fund to promote the national development plan. We must continue to be seen as an economy that will grow, invest and drive forward.

This goes back to the plumber on his way to my house to fix the faucet. If it takes him 40 minutes by road or whatever method of transport he is using to get there and 40 minutes back, I have to pay for it as it is his chargeable time. We must ensure everybody in business in this country has proper roads and facilities, with networks such as the previously mentioned broadband, as well as all the proper facilities necessary for doing business. We must continue with the national development plan, or in other words, finish the motorways.

This Government will take a positive view and there is room available. We can modulate the surpluses and deficits when this situation passes. We had previous crises after the dotcom bubble and 9/11, which we got through. That two-year slump was within this decade and we will get through this slump as well.

Having looked after the less well-off and ensured business is ready again, we will be in prime position when world economies stabilise, as a free and open market, to benefit again. That is where we continue to take credit, by putting in place advance factories, promotion abroad, a suitable tax regime and the training for people looking for employment. In other words, we are still well placed for when this situation passes, as it will.

I have no doubt the US Congress will put through the necessary changes for the $700 billion package. As has previously been stated, support does not come unconditionally. There is a two-year limit on the guarantee given for Irish banks and the offer is not open-ended.

We have had previous experience with ICI. For many years, Irish banks subsequently paid a significant levy, far greater than any outlay initially undertaken by the Government. Changes are certainly required in the Irish financial services sector and it must be regulated and improved. Unfortunately, the main difficulties lie abroad and we have seen the dominoes fall. The fact is that no Irish bank has been nationalised. The Benelux countries have undertaken to fortify Fortis and two banks have been nationalised in England, namely, Bradford & Bingley and Northern Rock. In the United States we have seen AIG supported by the Government, as well as another bank whose name I cannot remember.

Notwithstanding these events, no Irish bank has gone under. The sound fundamentals spoken about to us in committee exist and the domino effect is not of our making. We were told Fianna Fáil needs to make decisions or changes but we made the necessary decisions today.