Joe O'Toole (Independent)

I welcome the Minister to the House. While I recognise his Department is under extraordinary pressure at this time, it is a good time to place on record my views. The Minister will be aware that I approach this issue from a disinterested, non-party viewpoint. The Government is making a serious error in its dealings and relations with the Opposition parties. It is time the Opposition was taken into the tent to the greatest degree possible. I say this not to make a political point but as one who has considered the issue from the outside.

The Government failed yesterday because, in not allowing the Opposition parties to buy into its economic plan, it ensured it had nothing else to do except tear strips off it on the one o'clock news. The Minister will be aware of my views on social partnership. The social partners have a major role to play in the economy. However, in addition to meeting the social partners, the Government should have invited the Opposition parties to engage in a process of consultation in which they could express their views. The Government could have taken on board some of their views. I am not proposing a national government but describing strategy and tactics. I am uncomfortable with what I see taking place because it maintains an unnecessary divide in politics. While I accept that oppositions must oppose and governments must govern, I ask the Minister to bridge this gap in an appropriate fashion. Perhaps he needs to use a pontoon or lifting bridge which can be taken up or down. If we expect the Opposition to wear the green jersey, we have to make some move towards them and this has not been done.

The Government's economic plan should have been launched simultaneously at Dublin Castle and in both Houses of the Oireachtas. A Minister of State could have presented it in each of the Houses at the same time as the launch in Dublin Castle. That would have presented an image to the public that the entire political system, the social partners and others were focused on the issue. If this image had been sent out, we could have coped with the differences afterwards.

Senator Butler has asked on several occasions where the unions have been throughout this period. I am sure he will have noted the comment by the former president of ICTU, Mr. Peter McLoone, who bravely stated on the news last night that salary issues must be discussed. He showed bravery in saying this because his telephone will be ringing this morning. While there is no shortage of people who are willing to engage, the Department also has a duty to draw them in. It does not matter if there is disagreement provided there is some degree of involvement.

On a positive note, the Government has done as well as it could in its dealings with the banks. This may not be a popular a view but the bank guarantee and the decision not to put taxpayers' money into the banks has been well handled. As we are all aware, however, it could go wrong at any time. On the Order of Business, I expressed serious reservations about handing €10 billion in trust to the people who got us into the mess about which we learned last night, and Senators on the Government side nodded as I spoke. I should declare that I am a member of the Irish Auditing and Accounting Supervisory Authority and have an insight into the audit process. The audit and accounting issue must be re-examined.

Four years ago, I pleaded in the House to provide in legislation for the making of decent directors' compliance statements. We need a legal requirement for a proper, extensive directors' compliance statement. This is not a 40-page document but a short statement in which a director states that he or she has complied with the laws of the land and good governance. Under the current legislation, if he or she makes a false statement, the auditors will pick it up. What is required, however, is to provide that directors who make a false statement or fail to declare a matter are in breach of the law. It is unfortunate that in the case which arose last night no law was broken. Trust has been broken, taxpayers have lost out and the Minister, the Government and the Houses have been damaged.

A second bank was involved in the case. A first-year accountancy student knows that if €87 million goes in and out of a bank once a year for a couple of days, it is not an appropriate movement. It is also one which information technology systems in banks are designed to detect. This transaction should have jumped off the screen and I have no doubt this occurred. I want to know about the other bank, Irish Nationwide, and the Minister's views on the issue. As the name of the bank was referred to in the media, I am not taking advantage of the privilege of the House. This case raises serious issues.

I also want to know how the audit committee of Anglo Irish Bank operates. Did it have knowledge of this case? Did the governance of the bank require that the risk committee be made aware that the director had received €87 million? These are simple questions which do not breach confidence. It would be a confidence boosting measure if the Minister were to state that the risk committee was not informed but should have been informed or, alternatively, that it was informed but took no action and he has asked its members to resign. We need to see clear action within the law. We do not need witch-hunts or lynch mobs but the spirit and letter of the law requires that clear steps be taken.

I want to know whether the audit committee met the bank's internal and external auditors without the chief executive being present. What were the external auditors doing? It appears they simply looked at the books on one day. If this is the case, it raises a difficulty. The Minister will recall the long night we spent in this House discussing the Credit Institutions (Financial Support) Bill. During that debate, I pointed out that a new audit had begun on 1 October. I want the Minister to tell me that the auditors were not so idiotic as to look at the accounts of the banks on a single day. They must examine the flow of cash in and out of the banks over the year. When the Minister sent PricewaterhouseCoopers into the bank two months ago, did it unearth this information? Major questions arise from this case. If the auditors did not find the information, what else did they not find?

As a public representative, it is my duty to put the case of the Financial Regulator. Senator Boyle and I had an exchange on this issue on the Order of Business. The authority of the regulator needs to be strengthened. I want the Minister to say we did not give the regulator authority to deal with matters such as 110% loans. The Oireachtas decided four years ago not to give him authority to do that. There is no point in asking now why he did not do it. We need to revisit the matter and should do so.

The regulator may have done nothing wrong. If there is such a thing as vicarious liability, someone should have done something. He is the guy behind the eight ball, as it were, and may have to take the hit on this issue even though he may have acted within the regulations. I want to see how we approach these matters.

The Minister should look at where Ireland stands on the implementation of the eighth or ninth financial directive from Europe on international financial accountancy standards. A Member mentioned matters in the Irish Financial Services Centre were not properly regulated. We are one of the last few laggards in the European Community who have not implemented those standards. We should have done so on 30 June. It still has not been done. Why not?

Attached to that set of standards is the quality assurance requirement which Commissioner McCreevy, who is not known for interfering in the market or over-regulation, has asked we also adopt, despite the fact it is optional. Will the Minister tell the House he will apply the quality assurance standard and implement all other standards?

These are examples of the things we are not doing. How do we approach what we are doing? I want the Minister to respond to the issues. I am not saying Government could have sorted out what happened to the banks. Whoever is appointed must be put in place on the basis of trust. Therefore, we must have people we can trust and who can prove we can trust them. The Minister has put forward a fine selection of people acting for Government into the various banks and it is beyond question that they are solid people. However, that is not enough.