Dan Boyle (Green Party)

This morning I attended the MacGill forum at the Royal College of Surgeons in Ireland, where the proceedings of the summer school were published. I made a contribution at that event on the topic of banking reform. Senator White and others mentioned the lack of debate on this Bill. There has not been a lack of debate on banking policy or in this House on the need to address such measures or hold open the possibility of such measures in the first place.

Government policy, as it transpired, has always been based on an understanding that in so far as is possible, these difficulties should have been worked out largely within the financial institutions themselves using private market mechanisms. As things turned out, we learned first - despite a lack of proper information, deceit and dishonesty on behalf of many institutions and people involved in those institutions - the scale of the problem and the need for the Government to intervene at various and growing degrees in protecting Irish national interests. That was the sole factor behind policy.

It would have been an error to nationalise, partially nationalise or cede large degrees of ownership in 2008. That would have led to us acquiring more of the debt more quickly and getting ourselves into difficulties in a shorter time. It was right to hold open the prospect which I have heard the Minister for Finance and his Minister of State mention in many debates in the House that the possibility of additional and large scale ownership of these financial institutions was still a potential part of policy. That is the genesis of this Bill and it has already been discussed in this and the other House.

If I have a criticism it is about the number of pieces of legislation we have had to introduce in this area because we are still of a mindset dealing with the effects of this crisis. This is just another piece of enabling legislation and we must still fill in the gaps in the nature of the types of banks we will have after this crisis. How many banks will exist, what type of banking will they carry out and how will they be directed as financial institutions operating in the interests of our economy? It is detrimental to all of us, in this and the other House, that we have been so preoccupied in dealing with the effects of the crisis and mechanics that we are missing the larger picture. We still have that difficulty going into 2011 and beyond. It is something to which all politicians and political parties should make a contribution.

There were criticisms of particular measures mentioned by previous speakers, including omitting senior debt and the mentioning of subordinated debt. I do not see that as a problem because the mechanisms I see relating to subordinated debt concern writing it off totally in relevant circumstances. I understand senior debt can be negotiated downwards at any time according to the usual practice. Ireland has a particular difficulty, however, in that we have accepted a package in which this policy option is not available. It may become available in the future because there is no legislative bar preventing the State, acting on behalf of the financial institutions in question, from seeking to renegotiate senior debt. The mechanisms in the Bill provide for the writing off of subordinated debt in its entirety. I have not heard anyone argue in favour of writing off senior debt in its entirety.

The problems we are experiencing were brought about partly by comments made by Chancellor Merkel. In raising the possibility of senior debt being renounced she sent the markets into a tailspin and the economy came under pressure. Suggesting Ireland can somehow get ahead of the posse and operate in isolation to solve our problems lets people down because it creates false expectations.

Some of the figures we have heard are inventions. The leader of the Fine Gael Party, Deputy Kenny, in an interview on "Morning Ireland" today, referred to a figure of €25 billion of senior debt. He is incorrect and when such figures are placed in the public domain-----