Kathryn Reilly (Sinn Fein) | Oireachtas source

Together with other Senators, I welcome the Minister of State to the House and I will try to be brief in my comments. As stated previously, this miscellaneous provisions Bill is a mishmash of a few different issues all in one and I will deal with each element in turn.

First, in respect of the Single Resolution Mechanism, all Members are aware it has been considerably more than half a decade since the banking crisis that had such a profound and catastrophic impact on Ireland. A recent European Central Bank, ECB, study highlighted how Ireland experienced the greatest drop in wealth of any eurozone country.

Since the financial crash, Members have been warned that Europe needed to act and that new banking laws and regimes would follow swiftly. Nevertheless, it is now approaching the end of 2015 and Members are still debating that new regime. However, in the view of Sinn Féin, recent years have seen a watering-down of the concept of a banking union designed to separate the link between banking and sovereign debt and as the Minister of State is aware, when the final vote was taken in the European Parliament my party did not support the diluted proposal.

This action was taken because Sinn Féin believes the taxpayer has not ended up being sheltered from another catastrophe and does not consider the new banking union to be a break from the past. During the first eight years, the national compartments in the fund will be the first port of call and it is only after this that the bail-in will happen.

During the debate on the fiscal treaty, much was made of the existence of the European Stability Mechanism, ESM, and it was heralded that it would help us to get some of our money back in the spirit of the new times. However, one does not really hear much about that use for the ESM nowadays and as this legislation shows, even in its primary purpose as a recapitalisation tool, it is not designed ever to be called upon.

Ten months also have passed since the option of applying for retrospective recapitalisation became available and the excellent report from the Comptroller and Auditor General puts the net cost of the banking crisis at approximately €43 billion as of the end of last year. As Members are aware, it is in the power of the Government to apply for this retrospective recapitalisation of the pillar banks but it is unfortunate this has not yet happened. This is one point that will stick in people's minds over the next couple of months, particularly as it was heralded as a game-changer and a seismic shift.

To turn to the deposit guarantee scheme, as the Minister of State said, the second Part of the Bill is to put in place a regime for the deposit guarantee scheme. At present, the deposit protection account holds €370 million, which is available for calls under that scheme and the plan is to hand €200 million of this amount back to the banks and other financial institutions, while the remaining €170 million will form part of a new legacy fund and this sum will cover contributions of the financial institutions for the first two years. Rather than some sort of new policy, for many banks this change in the short term will be a financial return. Furthermore, I wish to ascertain whether the credit union movement is expected to contribute to the deposit guarantee scheme and genuine consideration should be given to its arguments to contribute at a lower rate.

The section on insurance and continuance of regulation allows for the continuation of regulation of small insurance companies and those that are winding down. When Sinn Féin had first sight of this Bill in its own right in the legislative programme last year, my colleague, Deputy Pearse Doherty, and others were hopeful it was an antidote to the issues that arose with Setanta Insurance. There was disappointment this was not the case but the latest twist in the story is the Motor Insurance Bureau of Ireland is appealing the High Court ruling that it is liable for third-party claims at Setanta. This again has left the claimants in limbo, as they have been for many months, and this issue should be brought to a successful conclusion for the claimants as soon as possible.

The final element of the Bill is the amendment to the National Treasury Management Agency (Amendment) Act and it is clear this amendment has a single purpose, which essentially is to make it easier to sell AIB. This year, the State received €280 million in dividends from its shares in AIB, as well as €160 million in interest on its contingent convertible, CoCo, shares. Moreover, it will receive a further €160 million next year, plus redemption capital of €1.6 billion. I am aware that despite the spin suggesting otherwise, AIB is a long way from repaying the Irish people. Moreover, when speaking to the banking inquiry, the former National Treasury Management Agency, NTMA, chief executive and current AIB director, Dr. Michael Somers, essentially poured cold water on the idea of a gradual sale of AIB and suggested it could be more beneficial to the State to receive the annual dividends from a now-profitable AIB.

The Minister, Deputy Noonan, has also stated he will not sell the ordinary shares before the election, which I welcome, but there is no strategic, coherent vision of how to use our banking assets. It appears as though there is only a vague vision in this regard, which is to sell back to private investors what essentially cost us billions of euro. It is now time for strategic thinking on the role of AIB in the economy. It is a valuable State asset and influence should be brought to bear on it. While Sinn Féin is happy to allow this Bill proceed to the next Stage, it has concerns its Members have outlined both here and in the other House and we hope they will be addressed.