Alex White (Labour)

While it is perfectly reasonable for us to comment on the wider context of this Bill, including the Government's proposal on NAMA and the background to the development of this crisis, we must remind ourselves that this Bill deals with just one discrete element of what is described by the Government as a strategy for dealing with this crisis. While one could query whether the Government's approach constitutes a strategy, it is in any event a sort of drip-feed strategy in terms of its revelation to us as Members of the Oireachtas.

Obviously, the Bill is important and the Labour Party welcomes this deposit guarantee scheme, the extensions to it and the placing of it on a statutory footing. The increase in the amounts capable of being guaranteed, the question of minimum time limits for payout and the inclusion for the first time of credit unions are all advances to be welcomed. While I have questions on one or two of the details and will make some comment, it is important for us to be clear that this is just one discrete element of dealing with this overall crisis in the banks and financial institutions.

I am always struck when I hear Senator MacSharry and others seek to have us either set aside or forget what occurred in the past in favour of looking to the future. Looking to the future rather than the past is always a laudable objective and is what we all want to do because we want a bright future and to ensure it is brighter than it currently looks. That said, in response to Senator MacSharry's remark that we are where we are, I have said previously, perhaps to the point of repetition because when speakers on the Government side repeat their points, it falls to us to make the same responses, that the Government, and the Senator's party in particular, cannot seek to offload the substantial responsibility it holds for our being where we are. I am bound to suggest to Senator MacSharry, the Minister of State and others that it is not a question of us being where we are as if we had suddenly been carried here on a wave in a manner which suggested we had no influence on where we were going. Clearly, we did and to suggest otherwise can only be to suggest that governments have no influence or power to intervene or regulate, which of course cannot be the case.

I understand people arguing for and pointing to the need for more rigorous and robust regulation. Regulation of financial institutions and of the banking system is not a new concept. It has been around for many decades. It is simply absurd to seek to persuade people that now we will be good, now we will wake up to the need for regulation and now we will have all these measures, constraints etc. when it has been at the heart of the proper and prudent management of the banking and financial system worldwide, and certainly since the 1940s, that there should be strong and robust government regulation of banks and financial institutions. It is not good enough for Senator MacSharry or anyone else to say that everyone participated in a great party for ten years. It is part of the rhetorical attempt to spread the blame around by saying we all got something out of it, we were all involved and we all had a great time.

The lives of individual citizens and families do not work that way. People make economic decisions. People in a household or a family who sought to take out a mortgage, or a young couple who wanted to buy a house, were presented with the possibility of a 100% mortgage and in some cases higher than that. They availed of the opportunity presented to them, an opportunity which was sometimes pressed in their face and often included not just a 100% mortgage but also a car. People are rational decision makers in terms of the information available to them. It is not acceptable for us, as part of our so-called analysis, to say people who made those decisions, which now look as if they were not good decisions, were somehow part of the problem.

The economic and financial systems, including the availability of mortgages, needs to be regulated from the top. We have a Central Bank and a Financial Regulator, which supposedly backs that up. The Government cannot simply stand back and state it has an institution in place to deal with the situation.

I understand the Minister for Finance, Deputy Brian Lenihan, asked a perfectly good question in the other House yesterday on regulation in the future. He asked who will guard the guardians? He posed it as a perfectly legitimate question for the future and asked what kind of accountability the regulatory system will have to the Oireachtas or the Government. It is a reasonable question, but it is not new. That is the problem I have with the Government, namely, the suggestion that we will now look at the measures we will put in place to ensure we guard the guardians. The notion that the situation is new or we need to invent something new is not correct. I accept the system must be reformed and made more robust, but people should not be fooled or persuaded that this problem has only recently emerged and must be dealt with. It should have been dealt with all along and faced up to throughout the so-called splurge.

I apologise I did not have an opportunity to hear the Minister of State speak in this House. I had an opportunity to examine what the Minister for Finance said in the other House and he made some interesting points on regulation and the persons charged with it in the past. We know there have been some personnel changes, resignations and retirements in that regard. The Minister emphasised the question of who the persons were rather than the regulatory measures themselves. He emphasised the importance of ensuring the correct people are in place, and I agree with him on that. Where was that approach, policy and viewpoint when certain persons were appointed to the positions in question?

There was a less than oblique reference to a problem by the Minister in his speech to the other House. He said:

The far more important issue is that of the personnel who staff the entities because it is decidedly a question of men and women rather than measures. We must ensure that whoever takes over the position of regulator is a person who can ensure the regulatory system will be robust and can command confidence in the future.

That was a requirement of the Government at the time it appointed the persons previously appointed to such positions. It has not now become a requirement that the State should ensure the correct people are put in place, as the Minister now appears, from that comment, to believe. I invite the Minister to comment on whether my interpretation of those remarks is unfair in some way because that is what it appears to mean to me.

I understand proposals on regulation will be outlined this week by the Government. Will the Minister of State enlighten us on that? I understood from the remarks of the Minister for Finance that he would make an announcement later this week on new proposals and measures regarding regulation.

The Government, particularly the Fianna Fáil Members, become very exercised when the point is made by people on this side of the House that we are told Anglo Irish Bank is of systemic importance. This may not be the time to do so but I would like closer scrutiny of the word "systemic". I understand what the word means and we do not need to have it explained to us, but how or in what manner is Anglo Irish Bank believed to be a bank of systemic importance? We need detailed information. An answer that says, "It is pretty clear" is not an answer. I want demonstrated to the Oireachtas and the Irish people how and in what manner it is a systemic bank, through more detailed information. If one looks at the often-quoted example of Sweden in the 1990s, one interesting thing that happened was that the Government, instead of going straight to the floor of Parliament with all its proposals, which is what happens here, went to the Opposition parties first and sought, as far as it could, their agreement on the measures it proposed to take and then brought the proposals to the floor of the Parliament.

That has never happened at any stage in the discussions or crucially important debates we have had in these Houses in the past seven or eight months. There have been meetings with Opposition spokespersons but there have been no meetings of a satisfactory nature where real and detailed information is imparted to them. There should be clarity on what the Government is aware of regarding the exposure of the State to Anglo Irish Banks and the guarantee extended to the covered institutions, and what it believes the exposure and liabilities are.

There are sensitivities and confidentiality provisions, but the Government could impart far more information to the Oireachtas and the public about what is going on, which could make for a far more helpful public debate. It could assist in what Members opposite often look for, that is, a greater level of bipartisanship across the board on such a fundamental issue, namely, the future of the country and the banking system.

One cannot expect people to agree to proposals of which they are not aware. One cannot expect Opposition parties to simply nod through proposals of significant importance and seriousness if information is not shared with parties, politicians and representatives in advance. Senator Boyle referred to a wider level of political co-operation on these issues in the past. However, co-operation can only occur among serious politicians if information and clarity is made available to people whose agreement and support the Government is seeking.

The Bill and the extension of the deposit guarantee scheme are appropriate. It is appropriate to put it on a statutory footing. It is welcome that credit unions are included in the measure.

I am grateful to the Oireachtas Library and research service, which is very helpful in providing information on our discussions, particularly the more complicated ones, for putting together a digest. I note from reading it a comment by former Taoiseach, Garret FitzGerald, in 1989 when the scheme we are discussing was first set up under the Central Bank Act. He queried whether it was appropriate or right that there should be the same level of risk across the board. Each of the institutions must pay 0.2% of deposits towards this level of protection. I wonder if what he suggested in 1989, some 20 years ago, might still be case. I am thinking in this regard of a comparison between the position of credit unions and banks. Credit unions are required to pay the same amount as the banks. Is it appropriate or fair that credit unions have to pay that level of cover and are some of the banks being asked to pay a sufficient amount for it?

The point former Taoiseach, Dr. Garret FitzGerald, was making was whether people could forum-shop or consider placing their money in more risky institutions, thus gaining higher returns from their deposits and investments, in the knowledge they would still have this protection at the end of the day. Surely there should be some risk spreading in relation to the different types of institutions that are availing of the cover. The Minister of State might consider this question if he has the opportunity.

The broad thrust of this measure is to be welcomed.