Jerry Buttimer (Fine Gael)

I welcome the Minister of State who appears to be the permanent Minister for the Seanad. While I respect the Minister of State's decision to attend this debate, the absence of his senior Minister reflects poorly on the Minister for Finance. I share Senator Alex White's view that the Minister of State is not one of the best spinners in Government. The senior Minister should have attended this debate to show respect for the House.

As Senator McFadden stated, we need banks and recapitalisation is, therefore, necessary. Senators may not like to hear it but the measures proposed in the Bill amount to another bail-out. We are back in GUBU territory, an area with which the Minister of State will be familiar. Senator Twomey asked a pertinent question to which we require an answer. What will be the impact of the Bill on the National Pensions Reserve Fund? The purpose of the fund is being changed. Are we selling the family silver or putting all our eggs in one basket?

I welcome the Minister of State's comments on liquidity and the provision of moneys for small and medium-size enterprises. I hope the banks will lend to these enterprises as liquidity will be vital for economic growth and ensuring the country emerges from recession. My understanding of the Minister of State's comments is that the Minister for Finance will be given carte blanche under the legislation. This is a matter of concern.

I ask the Minister of State to examine the issue of control. Why will the NPRF be unable to invest without first seeking Oireachtas or ministerial approval? Is the €7 billion we propose to invest in two banks sufficient or is the sum involved perhaps excessive? What are the views of the gurus on this matter?

I read commentary, listen to Ministers and note the contributions of Members from all sides on these issues. However, as a public representative who canvasses four days each week, I have not heard anything from the Government to reflect the anger of ordinary people or the fear of small business owners — restaurateurs, shop owners and trades people — with a staff of three or four who are struggling to survive and may go to the wall. Last Saturday, I met a 72 year old spinster, a former national school teacher, who lives alone and does not have family to care for her. Having bought shares in Bank of Ireland which are now virtually worthless, she is beside herself with worry. She did not invest because she was greedy or wanted to make a profit but because she wanted to have a nest egg. As she pointed out to me, she hoped to feel financially secure when she entered a nursing home.

As Senator McFadden noted, people are fearful. I reacted initially with disbelief and laughter when I learned that people were withdrawing money from banks. I have since had many calls from people who are fearful about their savings. This week, for instance, we heard news about a credit union.

Senator Twomey is correct that while politicians are pilloried, the financial institutions have done everyone a disservice. Positive action must be taken on the remuneration and bonuses of banking executives. People must also be held to account in the courts. I do not say this to play to the gallery. The people in question must be held to account and solutions must be provided. While I have no sympathy for those involved, unfortunately, decent, honourable people working behind the counters of banks — I visit my local bank every week — are being wrongly attacked by every Tom, Dick and Harry. We have clearly lost trust and faith in the financial institutions.

Are the 25% voting rights and the 25% shareholding the State may acquire as a result of recapitalisation sufficient? Given that the State will effectively own the banks, it should control them. The share prices of the banks have collapsed and the markets, as we saw this week, have nearly imploded. Do we have confidence, internationally and domestically, that we can overcome this? From talking to people across the USA and the UK, I know they are seriously concerned about regulation here. Will this Bill allow the banks to create liquidity for our small and medium-sized enterprises? The Government seems reluctant to take on board the suggestion of the European Commission about setting up a bad bank. I wonder why.

I am concerned that the 25% voting share is insufficient. We need to see the interests of the people reflected in the banks. Where will the 8% dividend go? I am afraid the banks will use the money they get from us now and carry on their merry way. That cannot happen.