Eugene Regan (Fine Gael)

I support Senator Fitzgerald's amendment to the Order of Business. I also support her statements on the banks. The House had a comprehensive debate last week and took on trust the Government's proposal, lending it qualified support. We know it is only a temporary reprieve as we can see from the market movements this week. In respect of the capitalisation of banks, the distinction between liquidity and solvency — as well as the quality of the assets the banks hold and the manner in which they value them — has been missed in all this, and the Minister must provide clarification. Statements by the banks and the regulator in recent days suggest that it is just business as usual with the State guarantee and that everything will continue as before. One can rebuild capital by postponing dividends and increasing margins. We must be concerned, however, that when such a State guarantee is given the banks will not use it to build up their capital reserves in a way that is damaging to ordinary taxpayers who stand by this guarantee. If the regulator and the Minister cannot get to the bottom of this and set out a plan as to how banks can recapitalise given the comfort of this State guarantee, the Comptroller and Auditor General may investigate and report where there is prima facie evidence of substantial risk to State revenues. There is therefore a case to be made for the Comptroller and Auditor General to review the risk, liquidity and capitalisation of banks and report to the Dáil on the matter. Such reports could be prepared periodically as long as this guarantee lasts. Perhaps the Minister can make a statement to the House at some stage this week on the issue of capitalisation of the banks, as well as the idea of the Comptroller and Auditor General investigating the matter. Unlike the financial regulator, the Comptroller and Auditor General is answerable to the Dáil.