Sean Barrett (Independent) | Oireachtas source

I support the Minister's amendments. It will be extremely difficult to introduce competition into the Irish market in this way because the two pillar banks are so protected. We were doing the same for VHI for a long period and also for CIE and Aer Lingus. If outside investors see one or two companies being supported utterly and totally by the taxpayer, they will find it very difficult to put a proposition to their boards that they should enter the Irish market.

As other Senators said, Ulster Bank seems now to have been as irresponsible as any of the indigenous banks and the British taxpayer had to bear the burden for it. It is probable that Bank of Scotland Ireland was even more irresponsible than the others. The first understanding is that the British taxpayers will pay if any of these banks goes broke. We have been caught to pay for the Irish ones. Even then there is a downside risk because the first bank in this country to go belly-up was DEPFA. Much of the subsequent hostility of Germany towards Ireland was that DEPFA bank was not sufficiently regulated within the IFSC.

That cost the German taxpayer dearly. New banks are needed. As the other Bill before the House has in mind the separation of utility banking and casino banking, perhaps we might rebuild banking. The irresponsibility that took over Irish banks - Anglo Irish Bank, AIB and Irish Nationwide Building Society were appallingly unregulated businesses - has cost us dearly and left us in a most unsatisfactory position. So far our experience with foreign banks has not been good.

I wish the Minister of State well. Unfortunately, it will be a long time before any Member of the House feels the benefit of the new banks. Perhaps, in retrospect, the Industrial Credit Company had an expertise on which a completely property-based associated bank system was based and we have to try to recreate it, perhaps through the foreign banks the Minister of State mentioned. I know the Minister for Finance is keen to get his money back, as all of us are, but I no longer see the banks as entrepreneurial activities. They do not have the abilities, training or capabilities to do that work. Inventing new kinds of bank, on which the Minister was very keen the last day and which the Minister of State has mentioned again, will be the way forward. Bringing them in, as proposed in these two amendments, is an advance. Like other Senators, I wish the Minister well in these endeavours, but I would like to be much more optimistic that this will work as it deserves to. We need that expertise. As an alternative to pouring good money after bad, it is well worth exploring.

In the current edition of The Phoenixthere is a downbeat assessment of where AIB stands as one of the pillar banks. I know the Minister is reasonably optimistic, but unless the corporate culture changes and the banks improve - we in this House would like to see evidence of this - I do not believe they will play much of a role in promoting the economy in the future. What the Bill has, therefore, is a very good set of amendments which I will support.