Dan Boyle (Green Party)

In these rolling, frequent but necessary debates we are having on our banking system, I believe we are beginning to see, if not the land of milk and honey, a few shafts of light to take us away from the dark dismal times we have known. We should highlight what is being achieved while not losing the run of ourselves by pretending this journey does not have a long way to run.

Many elements of policy that have been put in place are starting to have an effect and are seen to be working. As we analyse this, and perhaps when we look at this period in retrospect, we will see that many of the arguments we have been having have been the wrong ones. We have been focused on the wrong areas. I believe, for example, the debate on the National Asset Management Agency will be seen to be a very misplaced debate. As a mechanism NAMA is working and will be seen to work. The money that will be invested in Allied Irish Banks and Bank of Ireland will return to the taxpayer because there are long-term viable futures in both banks.

Where we need to take stock is in regard to the dead money going into the other institutions. The real fault in the banking crisis we have experienced over the past three years lay in practices such as those in Anglo Irish and Irish Nationwide, especially the latter. The sense of proportion or scale of the rottenness of its loan book, and the fact that it was not a publicly limited company but a mutual building society which brought about this type of cost to the State, is something we will find very hard to come to terms with, both financially and as we restructure our financial services system.

Others will argue that the cost was brought about by the granting of the bank guarantee scheme. I do not believe that even in retrospect will we see that as being the cause of the problem. The right choice was made. What we are dealing with is the scale of the problems that existed. I am not sure there were alternative policy approaches that might have taken us out of the situation. The fact is we had bad banks and these are being dealt with, at an appalling cost.

What we need to discuss in this Chamber is what we will do in the future. We must start to set our sights on what form a third banking force, or what is left of those banks, can take. I postulate that it must be a viable alternative to the traditional banks there have been in this country. It must not be a publicly limited company that maintains the elements of mutuality but puts into practice the type of philosophy that lay behind those financial institutions. Irish Nationwide, in particular, lost sight of this.

Perhaps, as Senator O'Toole suggested, by making use of the widespread credit union movement in Ireland we will be able to offer a mutual co-operative banking alternative to people. If we end up with a banking system made up of a number of large banks that are pale imitations of each other we will have failed to make the most of the few opportunities that exist for restructuring and making more sustainable our financial services into the future. This will involve a number of difficult changes in most of our banks and building societies in terms of the number and type of people who will be employed. These are difficulties we must deal with in the coming year.

The announcement of the appeal for funds through Bank of Ireland and the good response it has had indicates there is a belief that we can come through this. That said, the problems all of us have been concerned about since the start of this crisis remain to be tackled. If, ultimately, the widespread fraud that was practised in some institutions and by key individuals is not seen to be tackled, with the identification of those individuals, their being brought through a judicial process and the necessary prosecutions effected, much of the good work that is being done will be undermined. We must understand this essential truth if we want to bring about public confidence in the restoration of our financial services sector. This truth must be faced as much as the need to reform our political system, which we face on a daily basis. By one means or the other, we are collectively managing to do that.

On that note I would like to think that as we have these debates on a regular basis we can continue to look forward to a future where progress is being made but the necessary questions continue to be asked. This is not solely a Government responsibility and as there will be elections in future, there may be changes in government. Everybody must understand that this is a responsibility that will carry on for ten or 20 years. On that basis, if we take the right approach and make the right decisions, the progress that has been achieved can be sustained and we can return to better times.