Liam Twomey (Fine Gael)

The first question everybody in the House would like to have answered is what the Minister intends to do in 13 weeks if he intends to extend the scheme six days after Christmas. Will that be done around budget time or will there be another emergency session of both Houses after Christmas to extend the guarantee? Why was that date picked since it is during the holiday period?

Our party spokesperson on finance, Deputy Noonan, has moved an amendment in the Lower House, which calls on the Government to introduce legislation to provide for a bank resolution system that gives the Central Bank the power to wind up a failed bank and to negotiate with subordinate bondholders. Fine Gael cannot support an extension to the bank guarantee scheme as outlined by the Minister of State unless this amendment is accepted because it would strengthen the legislation underpinning the statutory instrument. I would appreciate the Minister's comments on that when he responds.

Fine Gael also has serious reservations about the quality of information provided by the Minister for Finance in the past to gain support for such legislation from the party. We know the guarantee was necessary two years ago and we know we need a functioning bank system because it is vital to the economy but, at the same time, we must also protect the interest of taxpayers. We have witnessed how they have been hammered over the past few years because of poor policy decisions on the part of the Government.

We do not know whether the Minister is giving us the full facts on this occasion. The Minister made persuasive arguments on the night the original guarantee in 2008 was introduced and stated the banks only had a liquidity problem. It transpires he was bluffing because he did not know the full facts. The problem was not only liquidity but also solvency. Many people have lost trust in the Minister because of what has happened during the banking crisis and the way he has presented himself at times. He bluffed his way through that night in 2008. He has continued to state that he did not know everything, that it was not his intention to mislead the House and that the banks misled him. There has not been much clarity about these issues in the intervening period in the context of people taking responsibility and taking the consequences for that lack of honesty. I have always given the Minister credit for being a first class communicator. The jury is still out on whether he is a first class Minister for Finance given the way these issues have been dealt with. His failure to obtain the full facts and his self-assured presentation of facts on that night masqueraded as fiction because he did not know them and that has cost the country billions of euro. We need to be certain that what we are standing over now is the truth.

The Government has lost credibility with the people but that does not compare with the loss of credibility the country has experienced abroad. While I acknowledge this has been painted differently, when the Central Bank Governor returned from a visit to Asia he was seriously worried because the further he moved away from Ireland and Europe, investors had more serious concerns about our economy. That concern also exists within the European Community. Ireland is a small, open economy but it only comprises 1% of the European economy and 2% of the eurozone economy. Sometimes living in our own little bubble in Ireland, we overinflate our own importance and what we are doing. We do not matter that much. International journalists have printed negative remarks and international investors have rapidly lost confidence in us. That is why the State is paying such a wide spread for borrowings in comparison to German Government bonds. One of the ways to prevent this happening is to ensure there is a sense we are telling the truth all the time and when we have been misled to ensure that is dealt with ruthlessly by the Government. The Director of Public Prosecutions has not brought charges against anybody and nobody has paid a harsh price for what has happened to our economy over the past few years. That needs to be cleared up by the Minister.

It is now known that Anglo Irish Bank was insolvent days before the blanket guarantee was passed in both Houses of the Oireachtas. The bank's managers offered the keys to the bank to Bank of Ireland, which refused them. In the close knit world of banking and politics, we are told no one felt the need to tell the Financial Regulator, the Governor of the Central Bank or the Department of Finance about this. Is it credible that when one bank approached another bank with its keys and asked to be taken on and the latter bank refused, nobody outside the circle in the small banking world in Dublin would have gotten wind of this? That is unbelievable. Patrick Neary, the former Regulator, who seems to have taken most of the flak for what happened regarding the regulation of banks has not spoken much publicly about his position but he has been undermined as a credible regulator and he has been shown up to have been incompetent and weak in his role. Was the environment in which he was asked to work made to not work in the first place? The Holy Grail of economics at the time was light touch regulation and perhaps this was part of it. There is a need for Mr. Neary to give his side of the story.

What was the role of the Central Bank Governor at the time? He was not from outside with the excuse that he did not know much about what was happening. He was a former Secretary General of the Department of Finance when the Taoiseach was Minister for Finance and he was appointed Governor by Deputy Cowen. It was a small group of people who were also politically connected yet we are supposed to believe that the Minister for Finance did not know that Anglo Irish Bank was insolvent when he asked us to vote for this. These are some of the facts that have emerged since the bank guarantee was passed by both Houses of the Oireachtas.

It also transpires from the report produced by the Governor of the Central Bank, Professor Honohan, that lower ranking officials within many of these organisations appear to have highlighted concerns but these seem to have got lost the further up the chain they went. These are matters that must be answered clearly by the Minister if we are to do what we say repeatedly in this House, that is, restore our international credibility and prove to the rest of the world that we take financial regulation seriously, both in the present and in the past, and that we intend to ensure it is the case for the future.

The Minister, Deputy Brian Lenihan, was asked specifically by Deputy Michael Noonan in the Lower House if he believed there was an issue of solvency involved. The Minister replied: "I have made it clear throughout discussions on this subject that the central issue confronting the Government last Monday evening was the liquidity of Irish banks, not the question of solvency." There is plenty of evidence that two years ago that the Minister was of the belief that this issue was not as big as it later grew to be. On Committee Stage of the legislation in this House the Minister was complimented on spending so much time in the House discussing the legislation. I tabled an amendment to provide that any loan or other moneys provided directly to a credit institution under the legislation should not exceed €10 billion. I corrected the amendment by saying that I did not mean €10 billion for any individual institution but that no more than €10 billion in total should be given to banks to bail them out. It is interesting that the Minister responded that it was not his intention or that of the Government to spend €10 billion on the Irish banking system.

There is a sense that perhaps the wool was pulled over the Minister's eyes. We did not get the full truth at the time. The Irish taxpayer is paying a big price for the hubris of many of the people, including Ministers, who were responsible for this disaster. It is time to get straight answers to the questions from the past so we can be absolutely positive the Government is fully committed to sorting out this problem. We must also ensure the people who were responsible and who did not do their job in the past pay the price for that.