Brian Lenihan Jnr (Dublin West, Fianna Fail)

It is important to remember the context in which this power is being sought. The power is being sought because there are circumstances in the Irish banking system which are threats to the stability of the system and one of the threats to the stability of the system is that a particular institution might not be able to access any risk capital on the markets. In such circumstances the Minister, in order to preserve the financial stability of the system, must be in a position to be the provider of risk capital of last resort and to be in that position the Minister must be in a position to overrule existing veto powers enjoyed by shareholders. Were the Minister not given that power the shareholders could reject a proposed investment and that would prevent the stabilisation of the institution concerned.

Clearly, any powers being exercised under this section would be proportionate to the object to be achieved. Were a bank well capitalised, for example, and able to access funds on the market in a credible way, it would not be possible for the State to exercise these powers to overrule the interests of shareholders. One is talking here about an extraordinary contingency which might or might not materialise, and equipping the Minister with powers to deal with it.