John Gerard Hanafin (Fianna Fail)

I support the Bill because the alternative proposed is neither as financially sound nor as acceptable to the marketplace in terms of its immediate knock-on effect on those who have invested in the banks which would lose the high standing they need. This party holds no brief for the banks. We are protecting the economy, to which there is no alternative. We saw what happened in Japan when the Government failed to intervene and there was a ten year slump because the "zombie" banks could not lend. That crisis could have been avoided, although the Japanese debt bubble was significantly worse than ours. The deal the Minister for Finance struck with the banks, whereby he gave them €7 million and received a coupon of 8%, will fully fund the non-performing part of NAMA. We are paying 1.5% for money and getting 8% in return. The interest the Minister will receive from the banks on that coupon will fully cover the €30 billion of non-performing loans.

Many do not give the full facts which are that of the €77 billion book value, there is €99 billion or €100 billion of securities in the first instance. They have been substantially written down, which is fully recognised. Those who gave the securities have lost them. That money is gone and they will never retrieve it. Whatever securities were given - banks insist on securities - the developers and builders who gave them have lost these assets. The Government then gave €54 billion of the €77 billion recognising fully that the asset value was €47 billion; therefore, it has given €7 billion up front. For this we have taken our equity stake in the banks and ensured our position has been maintained by reiterating that at the end of the term, if there is still a shortfall, the banks will be expected to pay and that there will be a levy on them to do so. Meanwhile, people do not discuss the fact that €54 billion is going into the economy and that the banks will lend from this sum.

World economies appear to be moving out of recession. America has, as has the United Kingdom where property prices are rising. Not all of the loans are in Ireland - 34% are held abroad, in the United States, the North of Ireland, the United Kingdom and elsewhere in Europe. There is good reason to believe, therefore, that the news is not all bad. In any seven year cycle from peak to trough of a fall in property values there has been no instance, not even in the Great Depression, in which the peak was not reached again seven years after hitting the trough.