Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State responsible for multi-tasking, as he seems to come here with many portfolios. He is always welcome. When we first met, the Minister of State was visiting Trinity College and we had some great discussions. When Trinity got some public assistance in the early 1950s, it was interesting that a condition was that the public assistance could not be used to increase the pay of the senior people in the university. If we could do that 50 or 60 years ago, why was it not done with banks later? The view of this House is to very strongly support the Minister in every way in bringing the sector under control, given the immense damage it has done to the country. It is not just a case of €64 billion and it is probably heading towards €90 billion when we take out NAMA-related and other assistance. I am happy that the bill for Ulster Bank goes to the British taxpayer, as that bank was performing in the same kind of reckless way. Towards the end of the Bill it deals with licensing of foreign banks and it is a pity they were not all foreign banks so that some other taxpayers would be picking up the bill. Unfortunately, it has become clear that Irish people are incompetent in the banking area and we may have been better off if we had never come up with the pillar bank idea. There are fears that it will become a duopoly that will demonstrate faults even worse than those outlined by my colleagues, Senators O'Brien and D'Arcy.

The Minister of State has mentioned the people who have investigated this issue and I would add the Wright report, which shows a lack of qualified people in the banks, the Central Bank and the Department of Finance. We cannot have people with qualifications in the classics, law or theology running the sector, and I know this is being addressed within the Department. I do not think the Governor of the Central Bank, Professor Honohan, was in Trinity when we were there but he has moved from being a colleague of mine in that economics department and has tried to recruit people appropriately. The idea that there would be a transfer of people without qualifications and who did not know what was going on between the Department of Finance and the Central Bank is appalling.

When I first came to economics, people like Professor Louden Ryan, Professor James Meenan and Professor Paddy Lynch moved from being eminent in Irish economics to being on the boards of banks. That custom seemed to stop and the banks stopped publishing the Irish Banking Review, which was an internationally rated journal. It is almost as if they did not want to know any economics, and in the way they conducted themselves that certainly showed. In books, musicals and plays the population of this country really resents the way those incompetent people foisted the cost of their activities on taxpayers.

I very strong agree with the Minister of State's comments on Part 4 of the Bill, when he mentioned that the Honohan, Nyberg, and Regling and Watson reports "on the financial crisis all referenced the role of auditors in the collapse of the banking system". I know of a case where a person in a remote county was before a disciplinary proceeding for having the wrong books for a cattle market or petrol station so how come the big four companies who prepared the accounts for Irish banks do not seem to be amenable to any sanctions at all? There are cases in other jurisdictions where people given dud advice by auditors sued the auditors and were recompensed. Is there a case even now that the Irish Government was sold a pup when those bankers went into Government Buildings on the basis of audited accounts that we now know were works of fiction? It is fair to say that our mutual friend, the late Brian Lenihan, was repeatedly fed misleading information by banks and he bore that cost to his own health afterwards. Let us have the auditors on trial for what they are doing. There have been excuses that the books were taken as they were and stamped, leaving them as audited accounts, but how widely blinkered were these people?

The Seanad has been unfairly accused, in the Taoiseach's attempt to abolish the House, of having done nothing to prevent the excesses of the Celtic tiger. Ever since we have arrived, all 60 of us have worked to assist the Minister of State and his ministerial colleagues in dealing with the matter. We have a Fiscal Responsibility (Statement) Bill that would place a stop to the Government giving out money in certain cases and the Mortgage Credit (Loans and Bonds) Bill is based on the Danish mortgage system. I gather that there are officials who would promote that system of 20% deposits, leaving much less default and smaller bubbles. We have also proposed a Bill to split institutions into a utility bank while getting rid of casino banks. We have had discussions with officials in the Department of Finance this week and the next meeting will be in July. I would appreciate it if the Minister of State could communicate to the Taoiseach that we have helped, doing everything we can in that respect. We have been most responsible in assisting the Government in dealing with an appalling inheritance of incompetent bankers and regulation of banks.

This problem is not just confined to Ireland, and the Minister of State is probably aware of the conflict in the United States that Mr. Bernanke referred to yesterday when he argued that Wall Street rules over Main Street, with quantitative easing making stockbrokers and those in the financial sector massively wealthy over a period of months. Mr. Bernanke has indicated that he wants to turn off that system.

In one of yesterday's newspapers, the trustees of the pension fund criticised Aer Lingus for not putting in enough money. Do trustees bear no responsibility?

Are they financially responsible if they pay out more than is in the fund, if they bankrupt it and if they keep giving added years to present people at the expense of future generations? Pensions trustees should be subject to the new much stricter regulations because they have been guilty of the malpractices that we all know about.

I hope that the insurance problem has been solved. We have had the ICI affair, the Allied Irish Banks scandal, the Quinn affair and the PMPA went bust. The FBD is the only indigenous insurance company left. Obviously that is a record of bad, incompetent regulation of an insurance business that kept going bankrupt and it is only now that we are getting our act together. The industry should be supervised by the Central Bank.

I have mentioned accountants, pensions and actuaries. I shall make an economic point about competence. One has got to recruit at the higher level of PhD. The same point was made in the Wright report, a study of the contrasts between the regulatory authorities in Canada and here. As the Minister of State knows from his visits, Canada has an admirable financial system that did not experience our problems. In Canada over 40% of people working in its regulatory agencies have a PhD in economics compared with 5% or 6% in Ireland. There has been a huge cost to the economy. It might be a good investment to send our people to the colleges such as Harvard and Yale to pick up these qualifications.

I welcome the Minister of State's speech and I shall make some concluding remarks on the legislation, particularly on whistleblowers. I spoke to one of the writers on the area, Estelle Feldman. She said that the problem is nobody protects the whistleblower after he or she blows the whistle and nobody reforms the "whistle blown upon" organisation, if I may call it that. She wondered whether there is follow-up when a whistle is blown. Another example is the McErlean case that was mentioned in the document drawn up, in the usual helpful way, by the staff of the Oireachtas Library & Research Service. Can we make whistleblowing useful in this task?

As the Minister of State will have gathered from my colleagues earlier, we all support this overdue legislation. We are in the fifth year of this crisis but I am not so sure that the corporate culture of the banks has changed. If it takes a message from the Seanad and Leinster House to change their ways then I am delighted to assist him in sending that message.