Sean Barrett (Independent) | Oireachtas source

Go raibh maith agat, a Chathaoirligh. I echo Senator D'Arcy's welcome to the Minister of State, Deputy Harris. I thank his officials for the speech which they supplied to us.

The first segment, as the Minister of State has said, contains the measures to deal with the single revolution - I am sorry - the Single Resolution Mechanism. It nearly became a single revolution mechanism when we were trying to perform the rescues a number of years ago, as Senator D'Arcy, myself and others are investigating. The mechanism is about 20 years too late. There should be a resolution mechanism and a rescue mechanism when a currency is launched.

I will accept any apologies which are unlikely to come from either Brussels or Frankfurt for doing things in such a hamfisted way, for which this country has paid the price. I heard Mr. Draghi respond to the Irish MEPs. I said earlier, during the Order of Business, that he sounded like a recruiting sergeant for euroscepticism. He has not really grasped that his duties are on behalf of the taxpayers and citizens of Europe. He put a limit of 15 minutes on the three Irish MEPs. By contrast, the Minister of State has been here well over an hour at this stage; we do not carry out our public business that way.

Mr. Trichet's statement to the Minister, Deputy Noonan, which he gave in evidence to the banking inquiry, that were the bondholders to be burned "a bomb will go off in Dublin", was also unacceptable. So was his conduct at the Royal Hospital Kilmainham. We still have a democracy here and the Minister of State is one of the shining examples of it.

The loss of the interest rate and exchange rate was a huge change to our banking system. The Bank of Ireland, with all its faults, had been there since Grattan's Parliament, since 1783. It took until the advent of the euro currency for it to go broke and then present the bill to Irish taxpayers, and it wiped out its own shareholders as well.

I sometimes think that neither Mr. Trichet nor Mr. Draghi realise the damage they did to this country. Better late than never that they are now coming up with mechanisms to deal with that problem. I note that some of them are somewhat delayed. The single resolution fund will not be self-financing until 2024. I accept the advice of the Minister of State that the 30 November deadline should not be obstructed by anybody in this House. It really has taken them an awful long time to get to the correct regulation of banking, however.The design faults of the euro, which they continue to ignore, and for which they blame Ministers or people in countries like Greece, show that their performance in Brussels and Frankfurt is not good enough. It is no use turning up this late to remedy faults in the currency without a sign of regret or apology on their side. They are seriously undermining the European project in the way this exercise has been conducted.

With regard to the deposit guarantee scheme, Senator Michael D'Arcy noted that if the cost to us was €64 billion, a fund of €55 billion might not be enough. That will remain to be determined by negotiations. In the briefing notes, the Minister of State mentioned the correct interval for the transfer from the Government to the Central Bank under that scheme. I think the notes suggested that one week was the acceptable period but, whatever amendment occurs to the Minister of State, I believe we will facilitate it.

On the continuation of insurance regulations, we have just discussed this on the Order of Business. There are a number of aspects to it, for example, the moral hazard involved when banks and credit unions are included together, and insurance companies are grouped together. We have a record in Ireland of always bailing out insurance companies at the cost of the customers of the companies that did not behave recklessly. It goes through a list - Quinn, PMPA, ICI and, latterly, Setanta, which is a really peculiar case. It was a company in Malta for which, mysteriously, we turn out to be responsible. When will insurance companies ever reform if they know they are going to be bailed out when they go broke by companies which have not yet gone broke?

One also has to add the concerns expressed earlier by Senator Kelly in regard to increases of 30%, 40% and 50% in insurance premiums. We need the Motor Insurance Advisory Board back and we certainly need much stricter regulation of insurance companies. How can we have a situation where inflation has been taken out of the system and where huge increases in premiums are happening? With regard to health insurance, for quite a long time premiums were being increased by a very high annual percentage because the State owned a health insurance company, VHI, and it had to make that company viable. I did not see much interest in controlling costs on behalf of the consumer.

Insurance regulation in Ireland leaves much to be desired and there is much popular dissatisfaction out there. We need that to be dealt with and put on a sounder footing because the current performance of the industry is not acceptable, and the policy of bailing out companies which go broke by levies on consumers who buy insurance from other solvent insurance companies is not a correct one and is riddled with moral hazard.

I turn now to the question of directed investment as outlined by the Minister of State. I would make the contrary case that we should be getting away from directed investment. All the evidence heard by Senators D'Arcy and O'Keeffe, and the other members of the inquiry, is that the NTMA saw what was happening in Anglo Irish Bank and said it would not put the National Pensions Reserve Fund into this bank, and it was then directed to do it. That power of direction remains. Surely the correct approach is that if at least somebody sees that an investment is not a good place to put the National Pensions Reserve Fund, and he or she tells the Minister, the Minister should respect that view and cease directing people to put investments into suspect vehicles for that investment, Anglo Irish Bank being the classic one. Therefore, is it a good idea to extend that power now, given that, of all the public bodies we have looked at in regard to the collapse of the Irish banking system, the NTMA was right? This section will remove any ambiguity so a Minister can say, "Even though you do not think it is a good investment, I am now telling you to put public money into this company." It seems a strange lesson to take from what we have been working on.

As always, I thank the Minister of State for raising so many interesting issues and for the speech, which I will peruse at leisure. I wish him well in this endeavour, which raises very important questions. None of us, throughout the House, want a repeat of what happened with the collapse of Irish banking.