Alex White (Labour)

The very last thing of which I would accuse Senator O'Toole would be copping out of this discussion because he has been closely involved in it throughout. The consequence of what he is saying, however, risks a cop-out from the issue we are trying to address. I do not believe the argument he has made wins through in the end for the following reasons.

This discussion is raging all over the world and the extent to which governments can intervene in relation to financial institutions and seek to have their lending strategies focused on the productive part of the economy, is not peculiar to Ireland. I accept the first thing that must be addressed, regardless of whether the banks are in public or private ownership, is the capitalisation issue. I agree with Senator O'Toole that very little can happen unless the basic capital requirements are in place. It is the stated intention of the NAMA legislation to ensure this can be fixed and sorted out. For the purposes of what I am saying now I accept absolutely that this is the intention of the NAMA project.

However, I do not accept that when this is achieved, however it is to be done, that there is not a role for State intervention. It is not a question of the Minister determining whether Alex White or Joe O'Toole should get a loan. I am talking about something that is much more strategic and structural in terms of the configuration of lending and touching on the regulatory point made by Senator O'Toole. How should banks be required and expected to configure their lending in terms of the overall proportions of loans going to productive activity as opposed to what I described last night as the casino-type venture.? One of the Minister's colleagues last night thought I was referring to a casino, meaning a physical place where people go to play games, when in fact I was talking about the type of activity the banks have engaged in for so many years. I do not accept there cannot be a role for the State to intervene by directing the strategies of the banks and communicating to them not just a guideline but an expectation of promoting lending to the productive part of the economy. To that extent I do not agree with the fatalistic approach.

I understand where Senator O'Toole is coming from and it is an attractive argument on one level to say that the State cannot intervene and it has to be either one thing or the other. I probably agree more with what the Government is trying to achieve with section 210 to the effect that there must be a role for the State in this question. Otherwise this entire project could not conceivably be sold to the public or to future generations. I do not go along with that point at all, but I accept it is not so simple either in so far as it is being indicated that this can be done or directed overnight. To that extent I agree with Senator O'Toole, although I believe he carried the argument too far.

To pick up on the point made by Senators MacSharry and Leyden about the guidelines contemplated in 2010, I remind everybody that there may not be guidelines. When one reads the section one finds that the third word is "may", and that is the most important word in the section. If one does not get past "may", there are no guidelines. In other words, the Minister does not have to issue guidelines. Senators MacSharry and Leyden are absolutely right and the Minister should consider changing that on Report State. I hope I shall be permitted to table an amendment on Report Stage to replace "The Minister may issue guidelines" with "The Minister shall issue guidelines". I agree with the Minister's amendment absolutely to the effect that they should be laid before the Houses.