Colm Burke (Fine Gael) | Oireachtas source

I welcome the Minister of State to the House. I also welcome the Bill put forward by Senator Barrett. As someone who has also published a Private Members' Bill, I know the amount of work involved.

This area is extremely complex and this is a very well researched and drafted document, on which I compliment him. He raises the very important issue of whether we learnt lessons from what has occurred, for example, with the banking crisis.

In the past 30 years the Government has had to step in on a number of occasions, with ICI, PMPA and Goodman. If the banking crisis had not arisen, would the Government also have needed to step in in the case of Quinn Insurance? The evidence is that approximately €350 million that should have been set aside to deal with ongoing claims was used for other activity. If the banking crisis had not arisen the Government might have needed to step in, as it did with PMPA a number of years ago. It begs the question as to whether we actually learnt from the PMPA debacle. I believe we did not. Based on what Senator Barrett has proposed, it shows that while we may learn some lessons, we do not necessarily take all the precautions we should in order to protect the economy and the overall financial situation.

This is an important area to raise. When the euro was created everyone presumed the regulation was in place at European level. I have often given the example of the German building company that came to Ireland. On one project it spent more than €1 million without any contract signed. I had to become involved and bail it out of a very difficult situation. It was a €10 million project with no contract signed and €1 million worth of work done. I remember eventually getting the contract signed and collecting €1 million on Christmas Eve in order to get it back to Germany for the new year. I asked them when they came back after Christmas how this had arisen and the response was: "When you came to Ireland, we understood you took everyone at their word." It shows that when we were drawing down the moneys available to us from Europe, Europe appeared to have been taking us at our word and we appeared as a country to believe there were sufficient regulations in place.

It is important that we learn lessons and put in place the necessary guidelines and controls. Based on the sequence of events over the past 30 years, I suggest in the next eight to ten years we will come across crises when the State may well have to step in again and perhaps we should even start planning for that at this stage. While some people will disagree with me raising that issue and being negative, that is the record over the past 30 or 40 years. Just because we are now dealing with and have more EU regulation and a more co-ordinated approach from a European level, it does not rule out the possibility of an issue arising in this economy for which we have not planned. That is why Government and Departments need to be even more observant than previously.

During the good times a number of banks gave money to their customers to buy their own shares. Do we now have legislation in place preventing that practice? I am not satisfied that we have. We know of one company doing that and I have come across a number of small investors affected. One investor drew down €4.5 million to complete a property transaction to refurbish and rebuild properties, and €1.5 million of that went towards the purchase of AIB shares. He remortgaged every property he had in order to draw down that €1.5 million. I know we are saying we have all sorts of regulation, but is it actually in place? I did not hear of the legislation going through in that area and I am not sure if we have put it in place.

What Senator Barrett has raised this evening is extremely important. We need to ensure we continually review existing legislation and also consider introducing new legislation as the need arises. We need to keep it under review at the moment.