Kieran O'Donnell (Fine Gael) | Oireachtas source

I welcome the Minister of State. I am glad to support this Bill. Having looked through it in the limited time we have had, I now want to pose a series of questions. My understanding from this Bill is that by 2024 the resolution fund will be in place. In the interim period, each state is required in essence to provide contingency funding to fund it in the event of a call on a particular institution. It is not only a bridging loan; it is a bridging period from now until 2024, an eight-year period. Let us put it in context. The overall value of the fund is €55 billion. In gross terms we peaked as a state having €64 billion of debt related to the Irish banks. That puts in context the magnitude of the banking crisis we had in Ireland. For the entirety of Europe we are putting in place a fund of €55 billion, while our gross debt was €64 billion. In fact, in the case of Anglo-Irish Bank, the taxpayers had to swallow hard for €30 billion, albeit over a longer period with the promissory note, which was welcome.

I wish to pose several questions. There is reference to a sum of €1.85 billion that the State is required to provide. How is that regarded in our national accounts? How is it reflected? Is it a contingency? How does it affect our national debt over the period in question? Am I correct in saying that the fund that goes into the Single Resolution Fund will be entirely funded by the banks when it is properly funded? How will that happen over time in respect of the Irish banks and how will they pay their contribution towards it?

My understanding of the way this will work is that the banks will be required to take a write-down of 8% of eligible liabilities available against losses. If that is not sufficient and further losses remain, it will then come into what is called a compartment. This is currently in the region of €173 million. What exactly is that? How has that fund arisen? How will that fund evolve over time? Is that fund separate from the Single Resolution Fund? How will that operate in practice?

This is what I am getting at. We speak about many of these Bills as being technical. Then they go into the world of abstract. Ultimately, what I want to know is whether this will cost the Irish taxpayer. Is it going to hit the ordinary man? That is what this is about and what it has always been about. Let us bring it back to brass tacks. Over the period between now and 2024 could it end up costing the Irish taxpayer? Are there any circumstances in which it will cost the Irish taxpayer if a bank fails? I know our banks are well capitalised, but one must always prepare for the worst case scenario - that is the accountant coming out in me still. After 2024, are there circumstances in which it could still cost the Irish taxpayer? These are the questions we have to pose.

Bridging finance has not always come with a great reputation over the years. Typically, it was available where building societies were giving mortgages and people had to get a bridging loan from a bank. It is a term I am not especially mad about. Then, it evolved into mezzanine finance of a form. I want to bring it back.

One section of the Bill amends the Companies Act 2014. The Bill is also relevant for transposing the European market abuse regulations and market abuse directive into Irish law. In particular, this relates to abuse, fraud and market regulations. This is something on which the Minister of State might come back to me with an answer. Has anyone ever been penalised under that legislation? We have a raft of legislation. I have always held the view that it is good to take a step back and go through the existing legislation and perhaps upgrade it somewhat. A great deal of legislation is in place. We have to implement this directive, which is to be welcomed. Has anyone ever been brought to court or fined under the current provisions in the Companies Act?

I want to leave it at that. This is part of an evolution whereby we are looking for a bail-in system for the Irish banks in order that we do not have a situation like the night of the bank guarantee.I remember being in the Dáil on the night of the guarantee, when I asked how much this would cost the Irish taxpayer. I was told there were sufficient assets to cover the liabilities of the banks and everything was hunky-dory. Over a short period, it ended up costing taxpayers €64 billion gross. Consequently, Members must ask the hard questions. They must protect Irish interests, part of which entails having a functioning banking system. However, any new banking system that evolves in Europe must underpin that the banks pay for their own mistakes; not the taxpayer. When I refer to the "taxpayer", I am talking about everyone, including both those who are employed and those who are unemployed, who pay taxes such as VAT and excise duty, which is often overlooked. I have always held the view that the banks always thought they would be bailed out by the Government and the taxpayer. Ultimately, we must make the banks believe this will not be the case in order that they will be more prudent in their actions. It is that balance and I commend the Bill to the House. I look forward to the Minister of State being able to shed light but underpinning that is whether there will be a cost to the Irish taxpayer.