Sean Barrett (Independent) | Oireachtas source

I move amendment No. 5:

In page 17, between lines 23 and 24, to insert the following:“22. The Minister shall not issue a direction to the National Treasury Management Agency when advised by the Agency that such a direction will reduce the value of its portfolio.”.

This amendment seeks to remove doubt as to whether it was correct to overrule the NTMA and compel it to buy shares in Anglo Irish Bank. My preference is that if the NTMA were to do that again, we would support it, because it cost €30 billion the last time. The Minister should have regard to what is happening to people's pension funds when good advice is being offered. In fact, I praised the NTMA for doing that. We found at the banking inquiry that the NTMA was one of the few organisations within the wider public sector to diagnose what was happening at Anglo Irish Bank. It advised the former Minister for Finance, Deputy Brian Lenihan, that it would not be prudent to put any of the funds from the National Pensions Reserve Fund into the bank but he issued an order compelling it to do so. My concern is that a mistake that happened in the past could happen again. The advice from the NTMA was good and I commend it on that. There were failures of regulation, particularly of Anglo Irish Bank, which ended up costing us €30 billion. That said, I do realise that this is part of the wider scheme in which the Minister has to operate. I take the view that sometimes a financial institution should be allowed to fail because the cost of rescuing it is out of all proportion to any benefits that might accrue. The banking inquiry will show that around 25 people accounted for the loss of €30 billion. Why did the other 4.5 million people have to bear the cost, with the pension fund reduced by €30 billion? It is a matter of balancing and I would have thought that some acknowledgement that the NTMA was right the last time might be worth putting on the parliamentary record. Measures to prevent a recurrence of such events are worthwhile. Maybe there should be better liaison between the NTMA, the Minister for Finance and departmental officials, lest we have a repeat, because nobody in these Houses wants a repeat of the scenario whereby €30 billion from a pension fund disappears into a bank which proves to be worthless.