Larry Butler (Fianna Fail)

I am standing in for Senator Hanafin. I welcome the transfer of bonds, or non-performing debt in the banks, to NAMA. There is no doubt that what the banks have done has been shameful. They have been in denial for over three years. Lies were told to Oireachtas committees over the past three years.

I welcome NAMA for a number of reasons. It forced the banks to tell us the truth, which we received yesterday. In the case of Anglo Irish Bank, it was worse than we thought. Nevertheless, we know exactly where the bottom is now. I welcome the plan that has been devised by the Government over the past 18 months as well as the stabilisation of the banks which has ensured we are credible on the bond market. We also have a big financial services industry that employs many people.

It is important we send out the right message and, in that respect, all we have to do is look at how the market received yesterday's news. It was very positive. Bank of Ireland shares went up 20% and AIB shares went up 7%. Our approach was generally welcomed by the European markets, and the ECB congratulated Ireland on the way we are dealing with the current banking crisis and tackling our finances. I welcome the news we have got from the unions over the weekend which will ensure the work done over the past three budgets to correct our finances will mean we are all working together. This provides a great opportunity to start from here. It would be foolish to think there will not be difficulties. There will be difficulties we will be able to work ourselves out of them.

The Labour Party Members were the first to say we should have nationalised the banks. We now know that if the banks had been nationalised, all the debt would have been taken on. That is what we have seen with Anglo Irish Bank. Our approach with the other banks has been to allow a certain amount of market and Government support to ensure our banking system continues. The Governor of the Central Bank has ensured these banks will be well capitalised and will hold 8% of their deposits on their books at all times. That is a very sensible approach because if we have any shocks in the system afterwards, then at least the banks will be able to deal with them.

Yesterday was also an important day for small businesses in that €3 billion was put into AIB and Bank of Ireland and ring-fenced for enterprise and SMEs. That sends out an important message. We all know the majority of our workers are employed by SMEs and we know these SMEs have been starved of finance for the past few years. It would be foolish to think that we will go back to the old ways of excessive lending to businesses that will not be able to stay in the marketplace. The banks would be foolish to lend money to such businesses. A more sensible approach has to be taken with finance, and the main reason the banks are keeping 8% of their deposits on their books is because we have too much personal debt. Nobody has mentioned credit card debt and the dependence on things like hire purchase and so on. It is sensible to go back to having well-financed banks, and this is the plan which NAMA and the Government have put together. It is vital we continue with that. The international markets are telling us we are doing the right thing and that we should continue.

The Opposition should not accept everything we are saying. It is good to be critical and to tease out these things. It is also important to have a balanced debate. The contribution from the Labour Party was sad to say the least. Its Members are not living in the real world. With respect to the Senator in question, I do not believe she has any business experience in making comments of that nature. We are here to find solutions and I believe this is a solution to our problem. It is a very expensive solution and we should learn lessons from it. The Government has a certain amount of responsibility, but the banks were private entities and the Financial Regulator did not do his job. We have seen how well the new Governor of the Central Bank is doing his job in the last day or so. Mr. Elderfield is there to assist him and he is a fine man of great ability who understands the banking system which will be more solid when he is finished.

I thank the Minister of State for explaining the proposals on yesterday's NAMA announcement. He did a fine job in presenting the issue. Even though there is much bad news, there is a plan that will ensure our banking system will continue. It will help our economy which is the most important thing. We have to spread this out over a number of years, and that is how NAMA will make a profit at the end of the day.