Thomas Byrne (Fianna Fail) | Oireachtas source

I pay tribute to Senator Barrett who continues to bring forward important legislation, based on his own expertise and experience and that of his students and colleagues in Trinity College. It is very important that such expertise is brought to our national Parliament. It is a great pity, however, with the way that this Parliament works, that such expertise stops when the speeches are made, the discussion is over and the Government says, "Great job, thanks very much, goodbye." It will be a tragedy if Senator Barrett is not deeply involved in the talks that are going on regarding various legislative proposals being discussed at European level or awaiting publication by the European Commission. He deserves that and the country needs people like Senator Barrett, who is willing to spend considerable time drafting legislation. A Bill like the one before us does not just magically appear on a Monday morning but takes a considerable amount of time and effort. We should be grateful for the effort Senator Barrett has put into what is a very workable Bill.

It is a pity the Government is opposing this Bill. Its reason for doing so does not appear to have anything to do with the substance of the Bill. Indeed, the Minister of State has said that he agrees with much of the substance of the legislation. He also said that there are measures emanating from Europe that will deal with many of the issues involved but Europe does not have exclusive competence on many of these issues. We can legislate ourselves for our own situation and perhaps we should, to show that we have learned lessons from the crisis. We seem to be going back to the old ways in some respects.

Sections 8 and 9 of the Bill should be required reading for all Irish citizens. I believe those sections would receive unanimous support if they were put to the people in a referendum. They are very important sections and possibly deserve a Bill in their own right. They state, very simply, the criteria under which credit institutions may receive assistance from the Exchequer. This is such a critical part of the recent history of this country, as Senator Barrett has outlined, and the public deserves some reassurance as to how such matters might be dealt with in the future.

The shadow banking that was discussed here today referred to institutions providing credit while not being fully subject to normal banking rules. There is another type of shadow banking going on at the moment by banks which operate in Ireland but are not regulated here. Those banks are not subject to Central Bank rules on mortgage arrears, for example. Even Anglo Irish Bank and Irish Nationwide are not subject to those Central Bank rules. That is a type of shadow banking that must be addressed legislatively and not just through Central Bank regulation which, in any case, does not apply. We should examine the possibility of applying Central Bank rules to all banks operating in this country. Indeed, banks can decide not to be regulated by the Central Bank simply by moving jurisdiction. There is a particular problem with Bank of Scotland, Ireland, which has outsourced the management of its loan book to an Irish company. That company, Certus, is doing very well but following a recent court case, its staff are prohibited from offering affidavits in court on loans because they are not sufficiently familiar with them. Certus is an agency of Bank of Scotland, Ireland, collecting money on behalf of that bank in Ireland and is not subject to regulation. Bank of Scotland, Ireland, has been hauled back onto the scene by the courts, which is a welcome development. This shadow banking system, currently operating in Ireland, must be examined seriously. We need legislation and not just statutory codes of conduct from the Central Bank. Statutory codes do not refer to actual statutes but simply refer to the statutory powers of the Central Bank to regulate banks that are within its remit. This issue must be addressed because people who have borrowed from sub-prime lenders or from banks that are regulated elsewhere do not know where they stand at the moment.

Senator Barrett has not just dreamed up his proposals for reform but has applied his own expertise and that of his colleagues to the drafting of this legislation. He has also examined what is happening in the United States of America and the United Kingdom, which is very useful. I thank him for that but yet again, the Government is just saying "No". This has happened with previous Administrations which rejected legislation simply because it was proposed by the Opposition. I do not think the Minister of State said that the Bill was unconstitutional, which is often the argument used against Bills proposed by members of the Opposition. I would be surprised if constitutional issues are not raised at some point. The response is disappointing and makes one wonder about the purpose of this Parliament. It seems to be just for rubber stamping decisions. If we admit that, we may be in a better place. If we are not willing to accept really well-thought-out legislation then I wonder what we are here for at all.