Brian Lenihan Jnr (Dublin West, Fianna Fail)

——and the ratification of it which the Houses have given. I appreciate the support which has been given on all sides for this measure but I am also deeply conscious of the responsibility it will impose upon me in the days and weeks ahead.

I want to update the House on the progress we have arrived at in designing the scheme and the plans we have for it because it is an important one. My officials are working directly with officials from the Central Bank and Financial Services Authority of Ireland and the National Treasury Management Agency to design the scheme. Good progress has been reported to me and, following the enactment of the Bill, I want the scheme to be laid before this House early next week. It may be that the resolution of technical issues will mean it may be delayed for a few days beyond that but it is in the interests of the State that this be done as rapidly as possible because the Government statement, while it has given confidence and succour to the financial sector for some days, is not of itself a legal document. We require the scheme to be put in place and the contracts to be arrived at with the individual institutions under it so that we have a clear and binding relationship with the institutions which are availing of this benefit.

I have been very much informed by the debate in this House in respect of what is needed in this scheme in a number of areas. The scheme will set out the basis on which the charges will be levied on the credit institutions benefiting from the State's guarantee, the revenue that it is expected to raise for the Exchequer and the conditions on which the guarantee will be granted under the Act. Clearly, however, there is a need for individuals who have a public interest perspective to participate at board level in the relevant institutions. There is a need for codes of practice for the work of risk committees in financial institutions. There is also a need to have lending practices that are in favour of sustainable, exporting and trading enterprises. There is a need to improve the quality of management. An essential requirement is to check the remuneration approaches, a point to which I wish to return later, which reward short-term performance and excessive risk-taking. Senator Walsh identified the problem very well. That is the essential problem with the remuneration packages that seem to be on offer and which have caused horror not only in Ireland but across the European Union and among my colleagues in the European finance ministries.

There is a need, as Senator Ormonde said, to return to traditional banking values in all our credit institutions and a need for responsible and prudent lending practices on consumer lending. We need a code of corporate social responsibility. We need careful assessment of the risk characteristics and sustainability of our new financial products and we need effective standards of corporate governance. All this has to be written in. I assure Senators that their concerns will be factored in to the drawing up of the relevant scheme.

In regard to remuneration, I do not want to be misunderstood on this point. It is not an appropriate role for the State to interfere in the commercial decision-making of any commercial body provided that decision is subject to appropriate corporate governance standards. The reality is that finance and banking professionals have been highly valued and highly remunerated by markets. As a whole in Ireland, both domestically and in the Irish Financial Services Centre, we need highly experienced and skilled expert people to succeed. Our banking sector is 10% of our gross domestic product. It is easy to abuse the banks, but it very easy also to forget how big a part they now play in our economy. However, success must be built on a sustainable basis. The rewarding of excessive and imprudent by risk-taking by executives is at the heart of the serious problems that emerged in the international financial system. For the future, sensible and long-term sustainable remuneration policies must be part of how financial institutions go about their business in Ireland.

A large and interesting range of contributions were made by Senators. I assure them that I have listened carefully to those whom I was present to hear and I read detailed notes of those who were here while the Minister of State, Deputy Mansergh, substituted for me for a short break. I was interested in the debate in this House, which I found refreshing, and I hope we can continue now with Committee Stage and proceed to see how we can improve this Bill.