Brian Lenihan Jnr (Dublin West, Fianna Fail)

In regard to the ban on lobbying the agency being amended to allow Deputies and Senators make representations, I assume they can make representations to the Minister in any event. I am anxious to ensure that a protocol on parliamentary questions is agreed with the agency to ensure that prompt, comprehensive replies are given to all questions.

Senator Quinn raised the question of how values can be assessed when the market is dead. That is precisely the point and that is the reason we have adopted the concept of long-term economic value.

On the question of the 80% development land levy hindering recovery, that levy only applies on future rezonings. The consensus among Senators seems to be that we have a sufficient supply of zoned land for present purposes. The reason the Anglo Irish Bank accounts are being released in December is that it has changed its year to an annual calendar year basis for accounting purposes.

I thank Senator Ormonde, who wanted more detail on the special purpose vehicle, as did many other Senators. The special purpose vehicle is a device which ensures that the agency and its borrowings are off-balance sheet for Stability and Growth Pact purposes. It involves an investment of €100 million. The return to the investor is capped at a very defined limit. In no sense does the investor, either private or public, participate in any wider profit which NAMA might have. There is a return level set on the basis of the return to Government bonds.

Senator Regan already mentioned the Bacon plan insurance approach. Like many other Senators, he raised the question of the various cases that came before the courts. Those cases were welcome because the courts upheld the principle that bank debt could not be compromised in the context of an examinership application. Indeed, had the courts decided that there could be substantial inroads into the bank debt in the course of examinership applications, it would have been difficult to introduce the NAMA proposal at all because it would have meant that what the taxpayer is purchasing here could be put at substantial risk in the courts. I think all of us were happy to note that the courts engaged in a rigorous examination of the various business plans submitted in the course of that litigation.

It must be said that any comments made by the courts in the course of those applications must be viewed in the context of the facts disclosed before them and one cannot read through implications for the wider property market by comments made by judges in commenting on a particular expert report which was submitted by a particular party in the context of a winding-up application. As I stated, the implications of those decisions were welcome in terms of the establishment of NAMA.

Senator Mary White referred to the need for credit growth. Senator Bradford was concerned about secretive NAMA decision-making. There is a need for a scrutiny committee and I made that clear in the other House. It did not arise as much here but it was mentioned by some Senators.

Senator Hannigan advocated the route of temporary nationalisation. He stated that I do not like it because I did not think of it. I thought of it many times. It would cost the Government more to borrow if we went down that road because we would have to compensate the shareholders and we would also have to capitalise the banks even more while borrowing on world markets. Undoubtedly one of the great advantages of NAMA is the support which the European Central Bank has given the project by permitting the bonds to be presented there at the 1.5% rate.

Senator Walsh made the point that ordinary shareholders, not bank chiefs, should profit from any bank profits. Dividends have not been good in the banks of late and I believe it will be some time before we see them again.

Senator O'Toole welcomed the French discussion on legislation to control levels of top bank official pay. Of course in the case of the guaranteed banks, we are ahead of the posse on this in that we have abolished bonuses and we have also set the monetary limit of €500,000. The consultants are paid very well. We do need specialist grades in the public service to eliminate the need for them. Specifically, my Department has recruited a bank analyst for that reason. We recruited him outside the service.

Senator O'Toole was sceptical about the talk about loosening of credit. It is true that banks will make commercial decisions, but there is a danger at present because of the sheer condition of the institutions, or at least some of them, that they are incapable of making decisions that are in their own rational interest.