Seanad debates

Tuesday, 10 November 2009

National Asset Management Agency Bill 2009: Committee Stage (Resumed)

 

2:00 pm

Photo of Peter PowerPeter Power (Limerick East, Fianna Fail)

Like Senator Alex White said, it has more to do with the detailed substance of the amendments rather than one's performance. That said, the Minister dealt in his first reply with quite a number of the points raised about these amendments.

When oversight, transparency and scrutiny are bundled together as one separate issue, they must be balanced against the real and important issue of ensuring the agency is allowed to work in an effective manner to achieve its aim and objective, which we as policy makers set out. Getting the balance right between these often competing objectives is where the skill lies in drafting this legislation.

I acknowledge Senator Alex White's point that no Member, not even Senator Ross I would venture to say, has experience or expertise at the cutting edge of banking, finance and the intricate detail that will be dealt with by the NAMA board. Our expertise is in policy making. We must ensure the board is fully equipped from a policy perspective to be able to carry out its aims and objectives. That is why in this endeavour we have to chose the correct people to do the job.

In this House, the Minister reiterated his offer to the Lower House that he will inform Opposition Members about his thinking about appointments to the board. The board will be charged with carrying out the executive functions of the agency and implementing the provisions of this legislation. It must ensure it protects the interests of the taxpayer and secures a proper return. As we are delegating these powers and functions, we must have trust in the people in question and accept their bona fides that they will do the job to the best of their ability commensurate with their skills and experience. That is the other side of the equation.

The question for this discussion is: when did we stray from one side into the other? When did the legislators become the Executive? While it is important to have oversight - I suggest the more correct word is "scrutiny" - to scrutinise the operation of the board, it is ultimately the function of the Oireachtas committee which will be set up under the Bill. The question, therefore, is whether that committee of the Houses will be properly equipped to make an informed and proper judgment and critique on whether the board is operating in a manner that it carries out its aims and functions and, more importantly, follows the policies and principles set out in the earlier part of the legislation. That is the key question and, in fairness, Senator White addressed the specific point.

I draw Senator White's attention to the relevant section on the production of quarterly reports. I think it was Senator Donohoe who asked whether the level of oversight would be more extensive than in the case of other agencies. I do not know of any other State agency which is required to report on a quarterly basis. I make the point to Labour Party Members that an amendment was tabled in the Lower House to the effect that the NAMA board would issue monthly reports to the Oireachtas committee. We strongly suggest that would stray across the boundary to which I referred. Is it the case that Oireachtas Members will be sitting in on board meetings? That is the line being taken. Quarterly reports containing important information is the key issue.

Let us examine the information that will be provided for Members. The first piece of information which will be granted is on the number of loans outstanding, their conditions and, most importantly, the way they are categorised as between performing and non-performing loans. That is an important issue in terms of confidentiality, about which we will speak later. The second piece of information is on non-performing loans, categorised as to the degree of default, distinguishing between capital and interest payments. This was a significant issue on Committee Stage in the Lower House. We must remember that this is a new amendment brought forward by the Minister in response, in fairness, to the concerns expressed and suggestions made in the Lower House. The third piece of information is on the number of loans being foreclosed and otherwise enforced during the relevant period of 90 days, another important issue. The fourth piece of information is on the number of cases in which liquidators and receivers have been appointed in the relevant quarter, while the fifth is on the list of all legal proceedings, except any proceedings to which a rule of law applies, which prohibit publication for whatever reason under the relevant provision of the Constitution - Article 34.1, if memory serves me correctly - and a list of all proceedings commenced by NAMA and each NAMA group entity in regard to bank assets during the quarter setting out the title of the proceedings, the parties and the reliefs sought by NAMA or the NAMA group entity concerned. The sixth piece of information is on a schedule of any finance raised by NAMA and each NAMA group entity in the relevant quarter, the sums recovered in regard to property sales, other income from interest bearing loans owned by NAMA and a bridged balance sheet of the assets and liabilities or any NAMA group entity, a complete schedule of the income and expenditure of NAMA and an updated schedule of all information subscribed to in sections and 2 and 3.

I am setting out in detail the nature and quality of the information which will be provided in the quarterly reports because short of giving the actual names of the relevant individuals or corporate entities covered by NAMA, it is virtually all of the qualitative information that would be available to the board. Senator White made the crucial point that the advice available to the board would be of the highest quality but that is the qualitative information necessary to make an informed judgment as to whether NAMA is carrying out its functions or otherwise. This is a new section introduced to the Bill arising from suggestions and proposals made primarily on Second Stage in the Lower House. It is a real addition to the Bill but whether we talk about oversight or scrutiny, it is the quality of the information provided that is the key issue.

I believe I have dealt with the issues raised since I arrived in the House. Senator Bacik welcomed the Minister's comments. I reiterate that the Minister is open to the suggestion made and has taken it on board. I believe the Senator was satisfied with this.

Senator Fitzgerald raised the question of whether there ought to be a statutory committee or a committee of the Houses. There should not be a huge difference between the two but the Government makes the point that to be consistent, it ought to be a normal committee of the Houses. This is extraordinary legislation but that does not mean a committee formed by the Houses, given appropriate powers and provisions, including the power of compellability, and the advice available to it, should not be able to perform the function in a lesser way than a statutory committee. We make that point strongly.

In addition, I suggest a statutory committee would be enshrined in the legislation and not capable of amendment unless further legislation was brought forward, whereas a committee of the Houses allows real flexibility to deal with issues of oversight or scrutiny which may emerge over time in what we all agree is an unfolding situation where circumstances are changing all the time. We should all anticipate that, particularly in regard to credit flow, an issue of real concern to Members of the House, it will change in terms of different classes of borrowers and sectors of society. The Government submits that a serious degree of flexibility must be built into the legislation to allow the Houses of the Oireachtas and the Minister to bring forward whatever mechanisms are necessary to deal with issues as they arise.

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