Martin Mansergh (Tipperary South, Fianna Fail)

Inevitably in a debate on a Bill such as this, which is relatively narrowly focused, as Senator White pointed out, it is easy to be invited to go down many highways and byways, and I will not entirely resist the temptation.

Senator Cannon asked if there was any estimate of the level of deposits guaranteed. The answer is that there is a rough estimate by the Central Bank of the value of deposits covered by a deposit guarantee scheme where there is compensation at a rate of €100,000. Its estimate is based on the total value of deposits surveyed for the 11 institutions which were potentially eligible for the Government guarantee, approximately €170 billion, and the bank indicates that these form the vast majority of the deposits covered by the deposit guarantee scheme. It estimates that approximately 40%, or €70 billion, of these deposits would be covered by the deposit guarantee scheme. On top of that we can add the €12.4 billion of deposits held in credit unions thus giving an overall figure of approximately €82 billion covered by the deposit guarantee scheme.

Senator Cannon laid some emphasis on the burden on the taxpayer and made the point that the traffic was one way. It is worth pointing out that most of the moneys deployed to support the banking system have been drawn from taxpayers' money put aside in the National Pensions Reserve Fund, in other words, not taken out of this year's taxes. Because the Government had the prudence to establish the National Pensions Reserve Fund, which has been done by very few other Governments, that has given us a means of addressing a crisis of this sort. While the traffic may seem all one way at this stage, if things go according to plan further down the line a significant benefit could accrue to the Exchequer.

There is general frustration, which we all feel, that the wheels of justice turn slowly, but as the saying goes, they do grind exceedingly small. I would have a firm expectation that we will see developments in due course if crimes and offences have been committed.

With regard to the issue raised on both sides of the House of fixed and variable rate mortgages, to which Senator Hanafin responded, when a bank enters into a fixed-rate mortgage agreement it takes out a swap agreement with the market to cover that liability. Breaking that swap carries a cost which must be borne by the borrower. The current situation is tough on a great many people but I do not see that a softening on that is a real option for the Government.

Senator MacSharry made a strong speech, but I pick him up on one word. He referred to the fatal flaw of the single currency, but to use the word "fatal" implies we should not have gone into the single currency, which is not something to which I would subscribe in any way. However, this requires a major adjustment in behaviour and expectations. Last night I read a supplement from last week's edition of The Economist on the euro zone, which made the point, while not understating any of our difficulties, that Ireland was adjusting and adapting relatively rapidly. While this might surprise us and we may have thought we lived in a more rigid and less adaptable framework, the degree of willingness and adaptation is a credit to all parties involved, and I am not talking about political parties. I note that the staff of Senator Alex White's former employer, RTE, voted yesterday to accept pay cuts, which is one small illustration of this willingness.

Senator Paschal Donohoe had a number of questions. The Bill is not, nor was it presented in the speech as being, a complete answer to all possible problems. It is one instrument among others, one part of the financial safety net, but it can be helpful in protecting an otherwise solvent institution from failure.

The Senator also referred to the question of risky behaviour and queried whether this might encourage a revival of irresponsible risk-taking, if not in the short term then further down the line. The Minister has the option of introducing a risk-based system if he deems it appropriate and, if introduced, this could act as a deterrent to banks engaging in risky behaviour. I personally take the view that it will be some time before that sort of behaviour becomes a risk again but, equally, anybody who knows history knows that, with time and given the assumption that we get out of the current situation, confidence grows. There is a certain cycle in human affairs and I suppose the idea that we will be able to prevent for all time risky behaviour by banks that cause financial problems is on the utopian side.

I remember debates in this House on an issue in which the former Minister for Justice, Equality and Law Reform, Mr. Michael McDowell, took a deep interest. A few years ago the idea of regulation was to separate as far as possible the prudential functions of the Central Bank from the regulation designed to protect the consumer so that, while still under the one umbrella, the Central Bank and the Irish Financial Services Regulatory Authority had a certain arm's length relationship. That has all had to be revisited in the restructuring of financial regulation in Ireland and the Minister for Finance has indicated that a Central Bank commission will be set up, for which details are still being worked out. The Cabinet has not finalised its decisions on this reform yet but the changes will be significant.

With regard to the question of liquidity, which was raised by a number of Senators, particularly Senator Larry Butler, the National Assets Management Agency Bill will be very complex and will probably run to over 60 sections. Hopefully, when the institution is fully operational, the commercial banks will be in a position to offer increased lending to small businesses.

Senator Coghlan said that this legislation should be before the Houses before they rise for the summer recess. The Taoiseach dealt with this matter yesterday on the Order of Business. While he did not tie himself down absolutely in terms of timing, he did not think it would be ready for discussion before the recess and thought it more likely to involve a recall of the Houses in September.

In response to Senator Alex White, I am a sometime historian so I never have a problem in looking back. While I would not spend my whole time looking back, I would strongly defend it and feel it is important to gain perspective, to learn lessons as to where things have gone wrong and sometimes to draw inspiration from options that were considered at a particular time, which was perhaps not right for them, but for which the time is now right. I have no problem whatsoever in looking back as well as looking forward - I very often find looking back is a help to looking forward.

As I said on another occasion, although I cannot remember in which House I said it, there is an interesting debate with regard to the influence of a government in a social market economy. I made the comment that during the boom years, parties opposite in both Houses were disinclined to give too much credit to the Government and attributed the boom to many outside factors and other forces in society. I would not in the least claim, and I did not claim then, that the Government was mainly or wholly responsible for the boom.