Shane Ross (Independent)

We may get a bit more than that, but the point is that Deputy Mansergh is not there when the important things happen, nor is he privy to all the information the Minister has. That gives the Minister a knowledge and ability to impart that information with an authority which, unfortunately, the Minister of State, Deputy Mansergh does not have. I do not want Deputy Mansergh to take this personally because he is a very competent person, but in this area he should not be here. The Minister, Deputy Brian Lenihan, should be here, or we should accommodate him.

I say this with a strong opinion that the Minister, Deputy Brian Lenihan, is making tremendous strides in a very difficult situation. He has personally made an extraordinarily good impression overseas in this crisis and he has managed it with an increasingly strong authority, which we should welcome. This is all the more reason why he should be here. As everybody in this House will know, he helped the sale of the bonds this week and a few weeks ago because of how he sold the Irish story in Europe. It was quite easy for the NTMA to raise, admittedly limited, amounts of money on the bonds markets because of the Minister's performance and because he projected and proposed a plan which people believed was well thought out and that he had a commitment there. That makes it all the more important that he should be here. Those are the optimistic signs. He is attempting to remedy a situation not of his making, so it is extremely difficult for him.

Today we are talking principally about the guarantee and its renewal, although it is symbolic of what is happening. My instinct is that they have to do it because they have to do it. To send out any signals that the guarantee would not be renewed - it is only next year - would cause an appalling run on the banks. We do not need a Bill. We know that commitment must be made and is being made.

It was an interesting idea from the IMF to introduce nationalisation and NAMA, but I will put them to one side for a minute. The banks are being given this guarantee and the bankers may begin to regard it as a licence to renew not necessarily their old practices, because I do not think that will happen, but their old power. I can see the signs already, before the bankers are properly kicked in the teeth and told where they went wrong, and in some cases penalised for going wrong, which has not happened, I can already see the signs of them regrouping. This guarantee, which is a sign to them that things are normal, underlines the fact the Government is co-operating with them in this policy.

We need action which is far more radical than saying we will fill the boards of the banks with our own people, will see they do not get up to what they were doing before, and will let them go on their merry way. I have talked to directors of banks recently, and I am sure other people have, and there is a very definite message getting through that they are independent of Government. There is a definite tension and battle between them and Government as to who is in control. It seems control is already passing from the Government, which never really seized it, back to the banks.

The Minister, who has done a magnificent job in removing the chief executives and chairmen of the banks, sometimes helped when they committed career suicide, seems with the Government to be stopping at that. It is not too difficult to get rid of these guys but when it comes to replacing them it is more of the same, which is an indication that we are just trying to get over this hump rather than thinking of anything radical. In Bank of Ireland they have replaced the chief executive and chairman with old Bank of Ireland people. The person they have put in as governor of the Bank of Ireland is extraordinarily able but is deeply imbued with the old Bank of Ireland culture. I cannot understand why the Minister did not put him into AIB if he was serious about changing. There was a vacancy there. Instead, he put two people from the AIB board and raised them up to chairman and deputy chairman of AIB. That is not a change. These are insiders getting jobs. The chief executive of Bank of Ireland was the favourite insider and he got the job. They are regrouping, eyeballing the Government and successfully staring it down.

We need to think more radically. The Minister speaks frequently and eloquently about the systemic danger which is there. He is right about Anglo Irish Bank, AIB and all these banks being systemic. Would he think that had Anglo Irish Bank, which maybe he could have let go, although I suspect not, been much smaller there would not have been such a problem? I would have thought they should be thinking that since we have only two or three big banks, we could split them and make them much smaller.

Instead of these big mergers people are talking about, AIB and Bank of Ireland getting together, IL&P getting together with EBS and all the others, why do they not make them smaller? This way there are no systemic banks, so if one behaves like Anglo Irish Bank, AIB or Bank of Ireland have behaved, they are so small it does not really matter. If they go out of existence the rest survive. This would remove the need for these blanket guarantees because one could let them go. They would be much less likely to go, but they could be let go.

I would be very interested to hear the Minister's comments, specifically on what is happening between Irish Nationwide and one of its debtors. I do not understand what is happening here. Irish Nationwide is apparently to sue one of its debtors for a large amount of money. That presents a serious challenge to NAMA and the whole banking system. I cannot see where it is going. There is a real danger of a domino effect because those who owe Irish Nationwide money, which says it will sue more people, owe vast and bigger sums to other banks. If Irish Nationwide puts them into liquidation or bankrupts builders, presumably the other banks will have to get onto that story almost immediately. What will happen then? There will be a collapse in property prices before NAMA even comes into existence. In effect it would gazump NAMA. We are entitled to know whether the Minister has given particular riding instructions to his own directors on the board of Irish Nationwide Building Society on this. If they persist in this, what is Government policy on it? Will it allow it to happen with a kind of domino effect resulting?