Willie O'Dea (Limerick East, Fianna Fail)

I understand that but I am trying to explain to the Senator that section 2 sets out the raison d'être of the Act. Section 2(b)(i) states, "to facilitate the availability of credit in the economy of the State". That adequately covers what the Senator is trying to achieve.

Under section 210(1)(b) the guidelines will include a review of decisions about participating institutions to refuse credit facilities. The word "may" is the usual way this sort of thing is done. The Minister for Finance has reassured the Dáil that he intends to introduce guidelines. I reiterate that commitment here. There has been an interesting debate on what those guidelines should be or what they can achieve. The purpose of the legislation is not just to set guidelines or decide how much the Government can intervene here or there. The basic problem was to deal with lending institutions, on which we were depending to provide credit for the economy, whose balance sheets were effectively trashed.

In the first instance the legislation will restore liquidity to these institutions and repair their balance sheets by taking the bad loans off the balance sheets and allow them to focus on their real business, lending. As Senator Harris has said, the days are gone when the Irish banks' main activity is borrowing money cheaply on the wholesale credit markets and getting involved in all sorts of property scams and speculation. The banks will return to their core business, lending, which will increase shareholder value in the interest of the institutions. They will lend to get a return that will exceed what it costs to give the money. That is what the banks must get back to doing and the legislation enables them to do so.

The Government cannot tell a bank that it must lend to certain people even though it is obvious they cannot repay the loans.