Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State. Towards the end of his speech, the Minister of State said the failures of the banking sector almost brought the country to its knees. The word "almost" might be deleted as the banks did a pretty good job in that regard. With regard to the pillar banks, are we creating a future duopoly? Might we have decided to break up the pillar banks? "Too big to fail" can mean "too expensive to save".

When the legislation was first introduced on 15 December 2010, it was to give the Minister the powers necessary to ensure restructuring would occur as quickly as possible. That has not happened, as is evident from our having to renew the legislation. There is cause for complaint about the Irish banking system. It is still property based. Some of the banks are still lending at a rate of 70% in this regard. They do not know the small and medium enterprises but are pretending they do.

No. 24 on the Order Paper is an attempt to change our mortgage credit model to the Danish model. I hope the Minister of State's officials will brief him on it. It is a question of having Irish banks take a real interest in small and medium enterprises because they have not been doing so. Since the turn of the millennium, the banks went on a property binge and engaged in personal lending. Hardly any of the money they borrowed abroad went into industry or agriculture.

The Minister originally wanted substantial and immediate recapitalisation of banks. It is disappointing that we must renew the legislation in that case.

Part 3 of the Bill gave the Minister the power to appoint a special manager in banks. There has been dissatisfaction over the rate of attrition of managers in banks. The rate has increased somewhat but it is felt that the managers got off fairly lightly.

Part 6 provides that the overriding duty of the directors of the relevant institutions will be to the Minister for Finance on behalf of the State. Previously, the directors had a primary duty to the company. This week, the Joint Committee on Finance, Public Expenditure and Reform is to question the public interest directors. They have all signed up to appear. As far as the public is concerned, they have disappeared. Although they are very eminent, do they talk to the public or say anything at all? We will know better after the coming two days. I am delighted the public interest directors have accepted the invitation to appear before the committee. The committee was disappointed that they appeared to go native after their appointment to the boards rather than serve the public interest. We asked the managers of the banks about the function of public interest directors. The managers regard them very much as part of their team rather than representatives of Members in this House or the other House.

Part 7 states the Minister can impose terms and conditions that relate to the non-payment of bonuses, and that the institutions concerned must comply with this. Bankers' bonuses still cause concern. I hope the renewal of Part 7 of the Bill will allow the Minister to address that.

Other provisions to be renewed give rise to concern. Sections 63 and 64 provide for the limitation of the judicial review and of certain rights of appeal to the Supreme Court. One should not interfere with the powers of judicial review or the Supreme Court on behalf of any bankers. Is it necessary to renew these provisions? I presume we would not wish to have to enforce them.

Section 75 states the right of appeal pertaining to the points which the High Court certifies for appeal to the Supreme Court is limited. Perhaps some of these measures were introduced in a hurry two years ago. People are disappointed in the banks.

The Minister of State concluded by saying the goals were to demonstrate to external parties what we were trying to do and to have profound restructuring of the banking system. How profound is it? Is the system still based on property? Does the sector have the expertise to perform the tasks the Minister of State and I would wish it to perform in regard to small and medium enterprises?

The last requirement was that we should be in conformity with the regulatory capital requirements set by the Central Bank. People see in publications that Permanent TSB may need another ¤4 billion. Anglo Irish Bank, irrespective of its new title, is still a highly unpopular institution. I do not know its value to the country at all.

We still have not dealt with the legacy of the Irish banking system. With regard to ghost estates, there are 82,000 empty houses. The activities of NAMA continue to annoy many Members on all sides of the House. Consider also the price of property being held up by forbearance.

Senator Michael D'Arcy referred to it. He wondered why we should defend buy-to-lets and he has little sympathy for them. It means that banking may be worse than we feel that it is if those three artificial props were removed.

The late Deputy Brian Lenihan junior - and we remember him fondly - thought the crisis would be all over in two years. Instead the legislation has had to be renewed. There is still a lot of work to be done before the banking system serves the economy in the way in which every Senator wishes. Some questions need to be asked. How much of the legislation needs to be renewed? When will we have a banking system that will help the economy to grow?