Liam Twomey (Fine Gael)

I move amendment No. 6a:

In page 2, between lines 18 and 19, to insert the following new subsection:

"(2) Any loan or other monies provided directly to a credit institution under this Act, shall not exceed €10 billion.".

Since the amendment was tabled under pressure, I would like it to read differently. It should read "to all credit institutions". The legislation is concerned with saving our financial institutions. When I made my opening address, I referred to events in the Japanese banking sector in the 1990s and how it took Japan more than a decade to get out of the mess. At around the same time, Sweden experienced a property crash.

What are the Minister's opinions on what will occur after the legislation is enacted? What are the potential second and third steps that should be discussed? We have heard that Irish banks are well capitalised and, according to some contributors, have become better capitalised in the few days since the Minister's guarantee of security for all deposits. We have also been told that, due to regulations in the sector up until recently, there is a low level of debt to assets. The sticky point is something that we do not know but have been told about, namely, the low level of bad debt in the sector as a whole.

Last year, the six banks in question made approximately €6 billion in profit, a significant amount. The deposit guarantees notwithstanding, what is the chance that the Government will need to loan considerable amounts to an Irish bank? From what I have gathered during the debate of recent days, that risk is low. A sum of €10 billion would be a large loan to any institution. It could only occur if a smaller bank merged with a large bank. What are the Minister's opinions in this regard and what does he know about the banking sector? We are second guessing. Should the taxpayer be told that a limit will be placed on the provisions, namely, that there should be no need to legislate for a loan of more than €10 billion? I wish to generate a discussion on this aspect.