Paul Coghlan (Fine Gael)

I welcome the Minister and thank him for his detailed overview of the Bill. Nobody doubts his bona fides or his intent. He has done many good things, all of which we welcome, beginning with the appointment of Professor Honohan as Governor of the Central Bank and Mr. Elderfield as Financial Regulator and the provision of the preliminary reports on the banking crisis by the Governor and Mr. Regling and Mr. Watson, both of which he accepted. He also sanctioned an independent review of his own Department, something none of his predecessors would have attempted to do.

I welcome the central tenet of the Bill, that we unify the various financial regulatory bodies in an integrated structure. I might be old fashioned, but I never believed in the twin pillar approach, of which Senator White seemed to be very critical. The fitness and probity provisions included in sections 18 to 44 are welcome.

I cannot accept that any of those responsible for steering the ship onto the rocks should be left on the bridge. The Minister represents the taxpayer at board level and I am fully behind him, especially in respect of the activities of the two main systemic banks, AIB and Bank of Ireland, in which he has had to take an increasing shareholding. Such persons are members of risk and credit committees and in senior management. Now they are talking about reducing staff numbers, which may be necessary. Staff numbers should not be reduced until all those responsible for the appalling mess in which this country is are removed. Perhaps then, the Minister can examine what is necessary. I earnestly request him to be on guard when dealing with these people.

I very much welcome the appointment of John Trethowan, the trusted banker, as the credit reviewer. In the interests of all those in small business and in business generally, it is important they have somebody reliable to whom they can appeal - a prudential banker, not a cowboy.

Sadly, this Bill is being rushed through the House with undue haste. It is significant reforming legislation and it needs to be considered carefully. I object to all Stages being railroaded through the House this evening. We have often said that is bad practice and I am sure the Minister agrees. That kind of thing makes for bad law.

This is an area which deserves proper and careful consideration. The extent of the regulatory failure we have witnessed in the financial services sector highlights the major structural problems in that sector, which need to be corrected. I hope the structure proposed in this Bill will deliver the changes which are so necessary but I have concerns that what is proposed may not go far enough in terms of achieving the level of structural reform required to deliver a dynamic, vibrant and compliant financial services system.

The commission should be given every opportunity to up its game and change the regulatory landscape here. It must move quickly to establish its credibility in financial regulation and show that the lax regulatory standards of the past are history. We must never again have the level of regulatory capture and failure which has caused untold damage to our country. We must also ensure the structures for holding regulatory authorities to account are robust and that they cannot hoodwink the public or Members of the Oireachtas with banal assurances that everything is fine and dandy in financial regulation in Ireland.

It is important that we distinguish the situation with credit unions from the position involving banks. It would be a travesty if failures in the banking sector led to a disproportionate and burdensome level of regulatory imposition on credit unions. To date, no credit union has failed, no taxpayers' money has gone into credit unions, no credit union has been nationalised and no credit union assets have been taken over by the banks. The regulation of credit unions has worked.

It is vital that we remain vigilant with the protection of members' savings in credit unions and that they operate to the highest standards of corporate governance. However, it is also vital that we are proportionate in our response to them and recognise that they are completely different from banks, have a strong social and community focus and are run by people on a voluntary basis. Their orientation, purpose and outlook is so different from the grab and greed motive and approach that sadly underpinned so much of Irish banking in the past ten years. They provide a beacon of light in the financial services world as a community-based, socially aware and connected local service.

Excessive and disproportionate regulation of credit unions runs the very real risk of wrecking the very strong volunteer ethos that has underpinned the movement since its establishment. Sadly, I fear that some within the Financial Regulator's office may not have the understanding of the importance and role of the credit union movement in an Irish context. I hope they will become acquainted with the movement here and will not act in a zealous way which undermines its role, purpose and function.

It is my strong view that the provisions of this Bill which deal with credit union regulation should be removed and addressed in regulation that is specific to credit unions. Addressing credit unions in the same context as the banks leads to a blurring of issues and a risk of contaminating credit unions with some of the regulator blight which has covered banks in recent years. That is unfair, unnecessary and unjustified in the context of the huge input of the movement nationally and locally. It is also unfair to the thousands of volunteers in credit unions who give willingly of their free time to support their local community's financial initiative.

I do not contend that credit unions should suffer from lax regulation rather that they should be regulated in a proper and considered context. I hope the Minister will look again at the provisions of this legislation as they apply to credit unions and either remove them or put them in abeyance pending a proper consideration of the regulatory issues that relate to credit unions.