Lisa McDonald (Fianna Fail)

Thirteen or 14 months ago we passed the legislation on the bank guarantees. I suppose we would have taken the NAMA option then if we could have done so, rather than go through the year we have just gone through. The Minister should be commended on the speed and clarity with which he is dealing with the issue. His position is not an easy one. He cannot just come into the House and say, "I support the legislation because I think it is great." We are in a very serious position and the last thing we need is uncertainty. NAMA is the only workable solution available. It is vital that this stimulus package is presented with speed. A few weeks ago we saw the flux in the markets; there is, therefore, an urgent need to see NAMA through to deal with such a situation. This package is the vital cog in getting the economy back on track.

Senator Cassidy mentioned SMEs. I want to raise a number of issues in that regard. Some of those who may be part of NAMA need clarification, as there are many rumours and much speculation about how it will work, whether some people will manage themselves or whether staff will be drafted in from other areas. AIB announced recently that it intended to give a 3.5% pay rise to its staff. Some of those in the banks involved in putting property valuations together in-house are already on huge salaries. We need to deal with this issue. It has been announced also that there will be 250 job losses in Anglo Irish Bank. The entire banking sector gives off a bad vibe.

To return to the question of SMEs, the dilemma for the banks is that we need to get credit flowing again in the economy, but they are scared to take a chance on any business or lend to anybody. In an international recession no bank will throw money at the SME sector, but it is suffering. I am glad to see an amendment is being made to the Bill to enable the Minister to intervene and force the banks to lend to SMEs. Obviously, the banks need to consider which are viable, but the appeal mechanism being built into the Bill is an improvement and will mean we can consider options such as trade insurance. It is important the Minister will have this power in order that we can force the banks to reach our percentage targets. That is the only way to deal with the matter, as in a market economy there is no other way to intervene. At the same time, it is important to ensure the banks are not starved of oxygen, as some of the so-called experts suggest might happen. We must consider some Government scheme to support SMEs in the future. The social welfare system should also be considered when dealing with this issue. Some employers have work available and could take on employees, but they cannot do so because they cannot get credit and have problems getting money in with which they could pay salaries. In the past that money would have been available through an overdraft or loan.

It would, as the Minister said, have been unimaginable for us to try to cap bankers' salaries or to dig deep into the banking sector a year ago. However, the financial crisis has presented us with an opportunity to make imaginative legislative changes. We can become the referee because the banks and the regulator have failed to maintain control. The era of keeping politicians off boards and trying to make up another State body to deal with something when politicians paid to do the job is over. We need to stand up and be counted. We must get involved in the banking sector and make sure credit controls are put in place, that we never again over-rely on the banking sector and that new regulatory regimes will be put in place.

One aspect that must be examined is mortgage brokering. Mortgage brokers helped to cause this problem and should be regulated. We need to regulate the professions that fuelled the crisis. Not much mention has been made of them, but they helped unfortunate people who should never have been given a mortgage to get one. Such issues must be given serious thought.

After the fall comes reform. NAMA is the first part of what I hope will be a fundamental reform package for the financial markets. We have had a variety of solutions presented today and in the wider debate, including Fine Gael's suggestion of a good bank and a bad bank. The Labour Party has proposed nationalisation for consideration. These options are diametrically opposite. If we wanted to select the middle ground, we would probably come up with the NAMA solution. It is the logical compromise and suits where we are at.

The age of soft touch regulation is over. As politicians, we can now decide the rules, not the banks or those who thought of the idea of derivatives which contributed to the problem. We must see reform in the financial sector worldwide to the same extent we are seeing it in Ireland. We have an opportunity that we never thought possible to reform the sector once and for all for the betterment of all, including taxpayers. Unfortunately, somebody must take the hit, but we are all in this together. We must grasp the nettle and reform the sector.