John Gerard Hanafin (Fianna Fail)

We appear to have two economies. We have the real economy and the financial economy. The real economy has been making significant progress in recent years. This week, an editorial in The Wall Street Journal complimented Ireland on the manner in which it was managing its economy and achieving necessary savings without the difficulties experienced in other countries such as the riots in Greece.

The economy is expected to grow by 3% in 2011 and some growth is expected in the second half of this year. We have seen an upturn in retail sales. The Central Statistics Office shows an increase in exports through Dublin Port. The Economic and Social Research Institute, the Central Bank and the European Commission are all agreed that we are heading for a period of growth. Retail figures in the motor trade are up, consumer sentiment is high, employment is stabilising and many respected financial journals, other than The Wall Street Journal , believe NAMA and the measures we have taken will work. We should not diminish the difficulties we had 20 months ago when we did not know what type of economy we faced into or what type of recession the world faced. Notwithstanding this, we have come through strongly and with flying colours. We can already see an element of growth. People are beginning to feel more confident in their jobs and this confidence is reflected in consumer spending.

Then there is the financial economy which caused all the problems. The financial economy can be affected by a regional savings bank in Spain going under, affecting global markets and the price of the euro, dollar, sterling and yen. The financial market is unstable because there has been massive fraudulent misrepresentation of what was happening. We are fortunate that this massive fraudulent misrepresentation took place mostly in the United States, originally with sub-prime lending, abuse by hedge funds and the market manipulation by those same funds. Problems were created and the security of banks driven down in order that when Lehman Brothers collapsed, inter-bank lending was not possible because no one in the banking sector was sure who they could trust anymore and strong difficulties were created within that sector. The people responsible are as guilty of a criminal act as many who appear in the Four Courts and receive jail sentences for relatively minor crimes. These people in the banking sector have got away with their actions for years.

There is a perception in Ireland that people have got away with wrongdoing. Let us face facts. There was systematic overcharging in our banking system. Even recently, I saw a cheque from Visa, which was a repayment for overcharging. There are other examples. Banks overcharged systematically on their charges, by giving incorrect interest rates and on currency exchange. It is high time good people who stand up and are prepared to give information were not held liable for letting down the financial institutions employing them. It is about time malpractice and parallel companies were addressed. Such companies are outside the laws affecting ordinary transactions because they are in the financial services sector, but that should not make a difference. This will be dealt with comprehensively in the whistleblowing legislation.

We have a new economy and a fresh start. We know what went wrong and it must be ensured it will not happen again because our financial memory is short. We should have listened to the warnings of commentators in the late 1920s and early 1930s and the inaugural speech of President Roosevelt who threatened to do away with merchant banks that had increased the credit available beyond the capacity of people to repay. The responsibility of those in the financial sector is double that of those who operate in the main economy. Therefore, we should take strong action now to restore credibility. Banking is about credibility and belief. We have created the economic environment in which to trade in this country, but we do not want a scenario in a few years where we will find a bank trading from the IFSC has been responsible for wrongdoing in another country, which could easily happen unless the Government properly and comprehensively deals with white collar crime. Such crime has been more devastating to economies, people's livelihoods and well-being and the future of nations than other forms of crimes. That is why we must be deal with it finally, as we embrace a new economy and a fresh start in order that stability can be restored to the financial services sector.