Paul Coghlan (Fine Gael)

I share the views of Senators Fitzgerald, O'Toole and many others regarding the economy and the banking system. The collapse of bank share prices reinforces the need for Government action if we are to oil the wheels of industry and commerce once more. As many Senators have said, matters are simply not progressing. The do nothing or wait-and-see policies of the Government are clearly costing jobs in small industries throughout the country daily.

The markets have decided that recapitalisation of the banks is very urgent. I share the concern of Senator O'Toole that recapitalisation of the banks might simply add to the their cash reserves to enable them to exceed Basel capital requirements, which appears to be a sine qua non for the banks at present. I believe there must be a firm direction built into the preference shareholding, or whatever system the Government chooses. I share the concern of others regarding why the process of recapitalisation is taking so long. The banks now operate a very strict lending policy. Prospective commercial borrowers must produce not only a good business idea, but any loans must be more than amply secure. The banks have more conservative values attached to the security offered than ever before. This is the reason we are at a standstill. Many people are not being paid and people are not allowed any working capital.