Ivana Bacik (Independent)

I am happy to speak on appointments to State agencies and public bodies but I do not see the point of the Green Party motion. At least the Fine Gael Party's amendment has the merit of making some substantive proposals for reform of the cronyism that we all agree took place in the past and continues to some extent in the appointments to State agencies and public bodies. It is a little rich of the Green Party, which has been in Government for almost two years, to put forward a motion that welcomes an ongoing examination and believes that reviews should continue. That is all very well if one is a bystander, a mere observer of the process of government, but it is difficult to accept from a party that is in government. It is symptomatic of the Green Party's ostrich approach to government, that is, let it happen all around one while one sticks one's head in the sand and pretends it has nothing to do with one. Senator Boyle is smiling. I am glad he finds it amusing. There are too many examples of this attitude being taken by the Green Party in government, as if it sees it as something that happens around it and not something for which it is willing to take responsibility or in which to accept active participation. That has to be challenged by those of us on this side of the House.

The appointment of individuals to State agencies and public bodies is an urgent matter. It is not something we can all simply agree should be subject to ongoing review and examination. Considering it as we must do in the light of the budget and the current financial situation, we can see a failure to regulate appointments to State bodies as lying at the root of the current problems. Would we now be in the dreadful financial situation in which we find ourselves today if we had a properly constituted Financial Regulator who had put under proper scrutiny the activities of the banks?

I was in the Dáil Chamber yesterday for the reading of the Minister for Finance's statement when he admitted at last that there are €80 billion to €90 billion worth of toxic and bad debts on the books of the banks. The extent of debt is extraordinary. It puts into perspective the figures we have been given that the Government's spending for the year is to be €60 billion. Tax revenues are less than €40 billion so we know there is a shortfall, yet according to the Minister, "The potential maximum book value of loans that will be transferred to the agency is estimated to be in the region of €80 billion to €90 billion".

Any person on the street would ask how a regulator could allow a situation to arise where developers were allowed to take on liabilities that are worth significantly more than the entire Government spend in one year. It is an extraordinary amount of money and I do not think enough emphasis has been put on those relative figures. When we talk in billions it is difficult to get any notion of what we are really talking about and the context for it, which is extraordinary. According to The Irish Times the estimate of €80 billion to €90 billion represents one fifth — 20% — of all loans across the six financial institutions. If that is correct – we are all speaking in somewhat speculative terms — it is extraordinary to think any regulatory system permitted that level of bad loans to be issued.

Likewise, we were not told to how many people the bad loans were issued. If, as some reports have suggested, it is to a small number of developers, a question must be asked as to how any regulatory system could allow such an enormous level of liability to be permitted by the banks, which has now exposed all of us as taxpayers to that level of liability. I am sure that in his response the Minister will say the national assets management agency will not pay €80 billion to €90 billion, even if that is the full figure of the value of the loans. The point I make is about the regulation of the banks' activities in the past that has led us into this situation. If it is true that the banks' liabilities for the bad or toxic assets is as much as €80 billion to €90 billion, it is a frightening scenario that such a level of liability was allowed to be incurred.

There is a question to be asked therefore about the Financial Regulator's role in permitting bank lending to that extent, which brings us to the point of regulation and the scrutiny of public appointments. At least the Fine Gael amendment suggested some changes to the system of public appointments that would allow for greater transparency and, in particular, for scrutiny by the Oireachtas. The Bill that was put forward by Fine Gael in July of last year, the Public Appointments Transparency Bill, would put in place a scrutiny system whereby the relevant Oireachtas committees would scrutinise appointments. Alternative suggestions were put forward that the Seanad would be the forum for the scrutiny of public appointments, which might be a useful role for the Seanad.

For major appointments such as the Financial Regulator it would be important that we would have an open and public debate about the persons to be appointed and their qualifications, and how effective they could be in carrying out their functions. That is not a novel idea; it is something that is done in the United States and South Africa. I met some of the South African judges on the constitutional court who were appointed after a process of public scrutiny. It is an instructive process to learn about the public scrutiny of those kinds of appointments whereby all manner of issues and personal matters are raked over in public where individuals are to be appointed to judicial office. That is perhaps beyond what is proposed here but it is something that brings into the open any bias judges may have. Among others, judicial appointments are subject to public scrutiny in other systems. When we talk about chairs and chief executive officers of public bodies and statutory agencies such as the regulatory authority in the financial sector, or the Equality Authority to which I will come in a moment, it is important to have some system of Oireachtas scrutiny in place as a matter of urgency.

I wish to speak a little more about the Financial Regulator before turning to the Equality Authority. There are now proposals to change the method of financial regulation. Reference was made in the Minister's speech yesterday, and it was flagged by the Government previously, to a proposal for a new regulator with much greater powers to replace the existing system. A new head of regulation is to be recruited under the auspices of the Central Bank and Financial Regulator. That is all we have been told about the recruitment process, other than that we will have an adviser for the recruitment process called Sir Andrew Large, who it appears is the former deputy governor of the Bank of England, but we have not been told what level of public scrutiny will be applied to this vitally important individual who will be charged with ensuring that the €80 billion to €90 billion worth of toxic assets will not be allowed to be built up in the future.

That is a very important role and it is urgent that legislators and the public should be told how the process of recruitment is to take place. It does not inspire confidence to be told it will take place under the auspices of the current Central Bank and Financial Regulator. The former deputy governor of the Bank of England is undoubtedly an expert and it is good to have experts from other jurisdictions to advise on the recruitment process, but we need to hear in more detail about how the recruitment will take place and what levels of public scrutiny will be applied in the appointment of this new individual. The timeframe is also vital and we need to know the answer to that also.