Paul Coghlan (Fine Gael)

I welcome the Minister of State, Deputy Mansergh. We see him so often that he could almost be described as our House Minister. We appreciate his presence. Like other speakers, I recognise the importance of banking for the future success of the economy. We have been through a frightful period and we are not out of it yet. Although there are outstanding issues, we hope matters have been stabilised. This debate follows on from the Minister's statement of 30 September last. We need to lance the boil of banking before we can move on from the current controversies. As Senator O'Malley said, those who were involved in wrong-doing need to be held accountable. The public has rightly contrasted the speed with which justice was dispensed to the man who drove a cement lorry into the gates at the front of Leinster House recently with the lack of speed with which the authorities have pursued those who drove the economy into the ground. We are anxious to ensure the threat to our economy is righted. We need to see accountability. This has to happen rather than being left in abeyance. Perhaps the Minister of State can update us on that front.

We need to reflect maturely on what we want from banks in Ireland. We should develop a clear strategy to meet our banking needs. The strategy should deal with issues like the regulatory structures that will apply, the role of the State in banks and the process by which the State will be removed from bank ownership. We all agree the State should not have a role in the banking sector, just as it should not have had a role in the bed and breakfast business, which happened when an arm of the State owned hotels. Sadly, many hotels are now under the control of NAMA, in effect. How can we ensure there are adequate levels of competition in the banking market to meet the needs of consumers? I would like to hear the Minister of State's thoughts on the so-called "third force" in this sector, which was much trumpeted in the past but about which we now hear nothing. What banking practices will be acceptable and what practices will not be acceptable? Sanctions and enforcement processes need to be clear and strong.

The key public issue that is causing problems is the level of personal debt. It would be hazardous to look at debt forgiveness processes. I do not doubt that many people are in distressed circumstances, but the bulk of the population is able to meet its commitments. The silent majority would be rightly outraged if preferential treatment was afforded to some mortgage holders. A proper scheme of forbearance is required, with some long-term storage of debt a possibility to overcome the block imposed by negative equity.

I also wonder about the exact information available on mortgage debt and negative equity. To help cut through the fog, it would be worth getting the Credit Review Office to assume some role to deal with how household debt is being handled by the banks. Are they being fair, reasonable and responsible? Again, I salute the work done by Mr. John Trethowan in that office. He was a very prudent banker and was certainly no relation of any of the cowboys who took over in Anglo Irish Bank and, sadly, some of our other institutions which followed Anglo Irish Bank down that road.

We need to look at what we are seeking from the banks. We should not expect them to lend to risky projects, despite the many applications which I am sure they receive in that regard. They should be conservative and prudent in their lending practices. Proper security must always be provided. Given much of what is being transferred to NAMA, there is not proper security and the taxpayer will end up picking up the tab when the promissory notes are called in. There is a role for a State backed investment company similar to the ICC which could be used to fund riskier profile projects. I look forward to hearing what the Minister of State has to say in that regard.

I salute all the efforts made by Mr. Matthew Elderfield since he took office as Financial Regulator and what Mr. Patrick Honohan has been managing to achieve in his role as Governor of the Central Bank. I will not refer to their predecessors. We have received reports and commented on these matters.

I raise the issue of retribution. Nothing has happened about the exceptional support from Irish Life & Permanent received by Anglo Irish Bank in artificially boosting its deposits. That was totally contrary to the national interest and fraudulent. There was also concealment by Anglo Irish Bank and Irish Nationwide Building Society. Will the Minister of State update us on these matters? What standards were applied by the auditing and accounting firms? What did they have to say about all of this? The Irish Association of Investment Managers and the Pensions Board were also strangely silent. It would be shocking to compliant taxpayers if these matters were left without receiving proper treatment. They are of the utmost concern to Members of this and the other House and citizens generally.

AIB is the most systemic bank and has a large branch network which is so vital and essential to the economy. The State is heading towards 90% ownership, although I do know if an exact percentage has been decided on. Perhaps the Minister of State might comment on the matter. Is he satisfied the Government has shown a firm hand in taking control? Are there still legacy directors in place? There was a total management clear-out in Anglo Irish Bank and, to some extent, other institutions, but I am not sure that has happened in AIB or Bank of Ireland. I look forward to hearing what the Minister of State has to say on that matter.

I refer to the NAMA hotels, some of which are competing unfairly with traditional hotels. They are damaging our hospitality and tourism product, which is wrong. I mean no disrespect, but they employ many non-EU nationals who are not able to show the customer traditional Irish hospitality. I would like the Minister of State to comment on the hotels under the control of NAMA.