Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

We stand over that change, defend it and are proud of it. The new banking structure we have put in place is a key policy difference, and it will hold this country in good stead.

There is no point in changing the structure and capital ratios, making the banks smaller and deleveraging unless we change the culture, hubris and arrogance. That is the challenge for the Minister for Finance and his colleagues in government. We must make sure the banks understand our language and lend in a prudent, sustainable way. They must see risk in a proportionate way and be at the heart of their communities. I am 43 years of age and I remember when I was 18 or 20, bank managers knew people in the community. That did not happen in the past ten years when an unsustainable banking model was pursued. We must get back to the local banks knowing the communities they serve. We must replicate what the credit union movement has been doing. We hope our policies, implemented within a month of being in government, make a difference in terms of getting the banks to a better place culturally.

When we came into government, the banks were bankrupt and in an appalling condition in terms of any sense of the future. The banks are still in the accident and emergency ward but let us look at what has happened in the past two weeks. Independently of the guarantee, Bank of Ireland raised substantial sums of money on the open market for the first time since 2009. AIB, which is 98% or 99% owned by the State, raised significant sums of money yesterday for the first time in three years. The demand was three or four times what one would expect. That is an example of slow but sure incremental progress in the Irish banking sector. We make this point in today's proposal. We are rolling over the eligible liabilities guarantee, ELG, scheme, but we are doing so for a reason. The reason is to bring to an end the ELG scheme as soon as practicable and possible. It will be a good day for this country, the banking sector, public utility companies, and the sovereign debt exposure we face when we can set the guarantee to one side. It will be a good day for Ireland and will show a sign of positive development and that the banks are beginning to get to a new plateau and move away from the umbilical chord inherent in the ELG scheme. When this Government came into office, the cost of borrowing ten-year Irish debt paper on the international money markets was 15%.