Brian Lenihan Jnr (Dublin West, Fianna Fail)

It is not only a matter of owning Anglo Irish Bank. It is not only a matter of having an effective 25% stake in Bank of Ireland and Allied Irish Banks. It is not only a matter of having a provision in this legislation whereby the two building societies come under effective Government control. There is already a 55% stake in these institutions and the Government has made clear since last April that if further capital was required, it would be by way of ordering re-equity. In other words, any further State investment would inevitably increase the extent of that nationalisation. Therefore the only issue about public ownership is whether, in terms of the so-called temporary nationalisation, as described, we want 100% ownership now. As Senator Ross rightly pointed out, it would make the valuation a great deal easier, as well as the degree of Government control over these institutions.

Side by side with that and ultimately looking at the viewpoint of credit supply, these institutions have to attract funds as well. They have to be convincing on world markets to the effect that there is some element of market discipline on them and that they are not just Government controlled entities such as the HSE or CIE. In my view the only way to do that is to ensure that what banks emerge from this have some residual market presence. That is the policy of the Government in regard to this matter and I have made that clear at all stages.

It is very important that a residual market presence is kept because this will sustain confidence in the institutions on world markets. There are quite a number of funders who do not fund totally nationalised entities and it is difficult for me to see how a nationalisation would be temporary if there is no exit route. At least if some presence is retained on the stock markets, there is an exit route for the State in disposing of a shareholding.