Paschal Mooney (Fianna Fail)

I welcome the Minister of State. This is one of a series of regular debates on banking which are important in order that both sides of the House can receive the most up-to-date briefing and feed into the overall debate.

The Minister had little choice on 30 September other than to continue the bank guarantee scheme which I understand will continue only until the end of this year. I also understand something short of a blanket guarantee was given than in September 2008, which is only right. Will the Minister of State respond to public concern about how those who invested speculatively - the subordinated debtors - will be treated? Will there be negotiations on the renegotiating of their loans which would be of benefit to the taxpayer?

In the face of a barrage of criticism levelled at the Minister for Finance in recent weeks about decisions the Government had taken in the financial sector in the past two years since the bank guarantee scheme was introduced that it had got it wrong, I was surprised to learn this morning that a few days before the decision was made to give a blanket guarantee in September 2008 the then head of Irish Nationwide Building Society, Mr. Michael Fingleton, had written a letter to the Department of Finance in which he had made it quite clear that in his opinion Irish Nationwide Building Society was viable as a going concern,as was its loan book, although there might have been some difficulties surrounding some property loans. It coincided with a similar letter sent by Anglo Irish Bank and the information conveyed to the wider stock market in the weeks leading up to the demise of Anglo Irish Bank that it, too, was a viable operation. In fact, the chief executive of Anglo Irish Bank admonished people for not buying more shares, despite the fact the share price had been collapsing since the previous spring and that the world and its wife knew things were not right with the bank.

Perhaps it is the nature of politics, but it is very unfair that the Government and the Minister for Finance, in particular, should be pilloried about decisions taken on the basis of the information available from those who were at the time seen as people of great probity. Growing up I was told the best job was that of a banker, a doctor or a lawyer. They were classed among the elite. Now I do not believe bankers would get into the premier division or into the league such is the odium with which they are viewed. However, that is being unfair to those who continue to be employed in the banking system and are trying to clear the wreckage of those who were in command. In that context, I compliment the Minister who has made it clear that there has effectively been a clear-out of those who made the decisions on reckless trading in the past few years and that this development continues. I welcome the recent appointment of the former head of Intel to the board of AIB.

The EU initiatives providing for a common regulatory regime must be welcomed. Perhaps the Minister of State might give some information on how they are progressing. I agree matters are very volatile and tht it is like a moveable feast. Chancellor Merkel and President Sarkozy seem to have reached a consensus, which marks an improvement in that the Germans were holding out for a strengthening of the regulatory regime, while others were somewhat lukewarm. Perhaps the Minister of State might have some up-to-date information on the matter.

I cannot help but reflect on a book entitled, This Time is Different, which was reviewed a number of weeks ago and of which I have yet to get a copy, although I intend to do so. Essentially, the premise on which the authors based their narrative was that, on each economic cycle going way back to the time of the Romans, the comment always made by contemporary government or rulers is that it will be different this time, and I could not help but reflect on the economic cycles that we have gone through in this country. Even at the height of the Celtic tiger, there were many saying it could not and would not last. I remember standing in this House in 2004 asking questions about the over reliance on the construction sector where it had already been statistically proven that 25% of our national wealth was dependent on it while the European average was only 10%, stating it was not sustainable and asking where was plan B. I am not for one moment suggesting I am joining the ranks of those who, in hindsight, can say, "I told you so". I did not say so. I did not know we were going to undergo the enormous tsunami that hit this country's economy from January 2009 onwards following the previous 12 to 18 months of volatility in the international financial sector. We are now dealing with the fallout of that.

I want to finish on a positive note. On casual reading of the financial pages of the national newspapers, particularly the commercial and financial sections of The Irish Times over the past few weeks, one cannot help but note a number of key positive factors that are feeding into the Irish economy to reinforce the view of the Minister, Deputy Brian Lenihan, that the economy is turning in the right direction. Commercial rents are up in the past two quarters. Liffey Valley has now filled all its vacant spaces. Several other of the shopping centres in Dublin, Waterford and Cork have also attracted international franchise holders who are at the very forefront of the retail industry internationally. If the economy is so bad and if the projections are so uncertain, why is it these persons are taking corporate decisions in Boston, Berlin, New York and elsewhere to come to this country to sell their wares? There are certain indications that we are moving in the right direction. I am particularly looking forward to the third quarter Exchequer returns because I believe there has been an improvement since June in the economy. For the moment, however, all one can do is commend the Government and the Minister and the Minister of State at the Department of Finance on the policy direction taken and wish them well.