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Dáil Éireann debate -
Friday, 7 Jul 1995

Vol. 455 No. 6

Netting of Financial Contracts Bill, 1995: Second Stage.

I move: "That the Bill be now read a Second Time".

The subject matter of the Netting of Financial Contracts Bill is something new, even to those involved in the area of finance, but the fact that such a Bill is being introduced only serves to underline the continuing commitment of this Government to fostering the financial services sector as a means of producing high quality employment and wealth for this country.

The Bill is short, containing only five sections, and seeks simply to ensure that agreements between two parties to set-off their mutual liabilities so as to arrive at a single net amount owing by one party to another are enforceable. The ability of both parties to reduce their mutual exposure to risk to the net amount owing between them at any time is clearly of benefit to both parties. The calculation of this net amount is called set-off or netting.

It is only the netting of liabilities in respect of "financial contracts" that is provided for in the Bill. These contracts are interest-rate, foreign exchange and commodity based contracts — more commonly called derivative contracts. The liabilities of the same two parties in respect of other trading activities between them will not benefit from the provisions of this Bill.

Stability, through risk management, is a substantial concern of financial services companies, and banks especially, in view of the large size of their transactions and the volume of business they may transact with major clients. In the case of banks and other credit institutions, there are special requirements that they hold reserves in proportion to their risk exposure. These requirements are embodied in the EU Solvency Ratio and Capital Adequacy Directives and their implementation is supervised by the Central Bank. The European Commission, however is currently finalising an amending Directive to the Solvency Ratio Directive which will allow supervisors, such as the Central Bank, to recognise the risk reducing effects of the type of set off or netting I described.

Netting agreements are already recognised in many countries, particularly non-EU countries and, therefore, banks based in those countries benefit from increased stability because having enforceable netting agreements reduces their exposure. Just as importantly, as they are permitted to carry lower reserves than their EU counterparts, they benefit from lower operating costs. The draft directive, which I expect to be finalised within the next two months, represents the Commission's response to concerns that credit institutions in member states are not disadvantaged vis-à-vis their non-EU counterparts.

However, Irish law does not refer specifically to netting and so there are doubts about the enforceability of netting in cases of insolvency. The company law area contains, as far as the provisions relating to examinership are concerned, specific barriers to the operation of netting or set off.

The Bill seeks to address the issue of doubt and specific barriers only to the extent that they interfere with the operation of netting agreements, and even then, only to netting agreements that cover derivative contracts. The more general issues in this area are the subject of recommendations by the Company Law Review Group and are being considered in the first instance by my colleague the Minister of State, Deputy Rabbitte. These issues have broader implications for business in general and will be dealt with by company law amendment, if appropriate.

The Government, however, is satisfied that the very narrow case in relation to netting agreements should be dealt with separately because of the capital adequacy benefits on offer to banks and similar institutions like building societies and investment firms authorised under the Investment Services Directive, such as, fund management companies, collective investment companies, unit trusts etc. and recognised third country investment firms when the forthcoming EU Directive is finalised and because of the need to maintain the most favourable environment for financial services consistent with the highest regulatory and prudential requirements.

The forthcoming directive will require those institutions seeking its benefits to furnish the Central Bank with written and reasoned opinion confirming that netting agreements are legally enforceable. Many banks operating in the domestic market and from the IFSC have made clear the importance they attach to the new directive. I understand that it was the undertaking to move ahead more quickly than many of our competitors in this regard that has secured one major international project for the IFSC already and that a number of major players in the North American market have signalled their interest in Dublin as a result of the enhanced overall package combining advanced communications, quality labour, high specification accommodation, and an accessible and responsible regulatory and fiscal environment now on offer in the IFSC.

I mentioned the Bill is short and that its purpose is simple, however, some of its provisions are complex reflecting the nature of the transactions and the agreements which cover them.

Section 1 contains standard definitions of the Central Bank of Ireland, the Minister for Finance, the Companies Acts, and party to a netting agreement is defined as a person, relying on the meaning of person in the Interpretation Act, 1937, so that an individual, partner, company of any kind etc. may be one of the two parties to a netting or master netting agreement. The term "money" is also defined so as to include foreign currency.

The term "financial contract" is defined to include those contracts, basically derivative contracts, which are contained in Annex III of the EU Solvency Ratio Directive. Annex III is currently being revised and the definition anticipates the outcome of that revision, especially as regards the inclusion of commodity based contracts. It is the contracts in Annex III that the forthcoming directive on netting will recognise. Other contracts which are regularly used in the market, but which are not recognisable by the Central Bank for capital adequacy purposes, are included in the definition, in particular, foreign exchange contracts of less than 14 days duration and contracts traded on exchanges.

Finally, provision is made within the definition of financial contract for (i) the Central Bank to formally add to the definition any contract contained in Annex III or any contract contained in any revised Annex or equivalent, and (ii) the Minister for Finance to include contracts within the definition, thereby allowing for the inclusion of new contracts which are rapidly evolving.

The term "netting" is defined to include the termination of individual financial derivative contracts, the calculation of the amount owing on each contract to either party and the addition of all of the amounts due and owing to each party to arrive at a single amount due by one party to the other. A netting agreement would contain provisions setting out the circumstances under which it will operate.

Netting agreement is defined so that any agreement providing for netting of financial contracts will be within the scope of the legislation. Such an agreement may also provide for the use of collateral by either party, that is where one party to an agreement requires collateral to be supplied for use in the event that a net amount is owing to that party as a result of the operation of a netting agreement. It is sometimes the practice in the industry that two parties would have separate netting agreements in relation to interest rate, foreign exchange and commodity based contracts and, accordingly, master netting agreements are used to sum the outcomes of each netting agreement.

Master netting agreement is defined as any agreement where provision is made to offset the amounts due between two parties under a number of netting agreements. For operational reasons two parties might have separate agreements in relation to their interest rate, currency and commodity based transactions but in the event of the agreements being triggered they would require that the net amount due under each, in both directions, be aggregated. Such agreements may contain provisions in relation to collateral, identical to those contained in netting agreements.

Under section 2 the bank is given the power to include in the definition of financial contract any contract included in Annex III of the Solvency Ratio Directive or any contract added to same from time to time. The bank will give effect to any changes by the issuance of notice under this section. As I already indicated, the definition of financial contract in the Bill is based on, but is more comprehensive than, Annex III of the relevant EU Directive, so it is not anticipated that the bank will have to issue a notice under the section on enactment.

Under section 3 the Minister for Finance is empowered to include, in consultation with the Central Bank, contracts or types of contracts within the definition of financial contracts. He is also empowered to exclude contracts from within the scope of the definition and, therefore, from within the scope of the legislation whether or not they were ever included. The Minister exercises his powers under this section by issuance of regulations which must be laid before the Houses of the Oireachtas. As a safeguard, to ensure that contracts in Annex III are not inadvertently ruled out, any regulation by the Minister which excludes any contract from within the definition of financial contract, cannot exclude any contract which has been included by the Central Bank under its powers under section 2.

Section 4 deals with enforceability of netting, setoff and collateral under netting and master netting agreements. This is the core section of the Bill. Section 4 (1) (a) provides certainty by disapplying any prohibitions which may exist in case law in bankruptcy, liquidation, examinership or receivership, or in the Companies Acts or the Bankruptcy Act, 1988, that netting is legally enforceable where a netting agreement exists. It also ensures that, where collateral is provided for in the agreement, a party will be entitled to use the collateral against any net amount owing to it as a result of the netting provisions of the agreement. The provision is drafted so that its terms will apply only to collateral, in the form of money, securities, guarantees and secured guarantees, provided specifically to meet any net amount due under a netting agreement. Identical provisions are included in section 4 (1) (b) in relation to the enforceability of master netting agreements and collateral and guarantees given in relation to them.

Section 4 (2) ensures that the relevant rules of law and sections of the companies Acts and the Bankruptcy Act, 1988, in particular, which deal with fraud, misrepresentation, etc. will not be set aside by section 4 (1). It also seeks to ensure that neither a netting or master netting agreement can be enforced by virtue of section 4 where the terms of the agreement would render it void or unenforceable.

The final two subsections of section 4 provide for two other matters which are deemed necessary to ensure the removal of doubt in relation to derivative trading in general. Section 4 (3) disapplies the provision in the Statute of Frauds, 1695, which obliges contracts with a duration of greater than one year to be committed to writing before being enforceable. This recognises the industry practice of screen-to-screen or telephone based trading, and that such trading is often in relation to two and three year contracts. Such contracts will now be immediately enforceable.

Section 4 (4) clarifies, for the avoidance of doubt, that financial contracts are excluded from the scope of the Gaming and Lotteries Acts, 1956 to 1986, and that they were always excluded. Clearly, that legislation was never intended to apply to derivative contracts. Section 5 provides for the short Title of the Bill.

To summarise, the main purpose of the Bill is to ensure that banks and other parties trading in derivatives will have the certainty that netting agreements entered into by them for the purpose of reducing their risk exposure will be legally enforceable in the event of bankruptcy, insolvency or examinership, providing always that the agreements are properly drafted. The Bill will ensure, where collateral is provided by either party specifically to secure potential obligations in the event of a netting or master netting agreement being acted upon, that the collateral so provided can be offset against amounts owed to that party under an agreement.

My appointment as Minister of State for the International Financial Services Centre demonstrates the commitment of this Government to the continued development of Dublin as a financial services centre that can compete internationally. The decision by the European Commission to extend the deadline for new entrants to the centre by an additional six years coincided with the formation of this Government. This focused my attention on developing a strategy so that those extra years could be used to best advantage. Having said that, six years is a relatively short time. I am also intent on looking beyond that again, where appropriate, to seek to secure the long term expansion and development of the centre. To this end, I am currently engaged in a series of meetings with senior public sector and industry figures aimed at developing an agreed way forward to capitalise on the opportunities provided by the extension of the deadline.

There is still a very significant flow of new projects being brought forward by IDA Ireland and the desired expansion for the centre will come naturally as the number of IFSC companies builds, as the range of products and services on offer grows, and as the experience and reputation of IFSC companies increases. I have set the following objectives in relation to the economic development of the centre: to substantially increase the level of direct employment from the current level approaching 2,500 over the next five years — it is hoped to double or perhaps treble this number to bring the total to between 4,000 and 6,000. The creation of at least 1,000 jobs in related back-office activity — between these two, 5,000 additional jobs over a five year period is a reasonable target, maximising consequential employment in associated legal, accounting and general — software development and security, cleaning, catering and other — services in the domestic economy. In addition, I have set up a long term review group, under my chairmanship and consisting of representatives at senior level from the Department of the Taoiseach, the Department of Finance, the National Treasury Management Agency and the IDA to plan in a concerted way the long term development of the centre.

I am intent on taking a proactive role in the development of the centre which I believe has now achieved its critical mass stage and is accepted as a player on the international stage. With this in mind, I recently visited Boston and New York and met some of the most senior figures in the financial world, many of them with interests in the IFSC or interested in locating there, to hear at first hand their views on Dublin. It was clear to me that the chief executives of major companies were acutely aware of the centre and the benefits of locating there, indeed many of them were visiting Dublin to see for themselves.

It is my intention to appoint an international ministerial advisory committee to advise on realisable targets to set to ensure that the great progress made in establishing the IFSC continues to gain momentum and is maximised. As part of my overall strategy for the centre, it is my intention to ensure that a continuous programme of legislative change, consistent with a well regulated environment, is maintained, so that we can keep our competitive position. This Bill is one such step in that programme and I commend it to the House.

I welcome the introduction of the Netting of Financial Contracts Bill, 1995, and I congratulate the Minister on his appointment.

There have been serious doubts about the legal enforceability of netting agreements when one party to such an agreement becomes insolvent. Such types of netting agreements are in regular use in the derivatives market. They help to reduce risks for the parties involved and bring stability to the market in general. I understand this legislation anticipates a European Union draft directive currently being finalised which will allow the Central Bank to recognise the risk reducing effect of netting agreements for the calculation of the capital adequacy of credit institutions. Obviously, it is necessary to be legally certain that such agreements are enforceable.

It is unusual for the Taoiseach's Department to introduce legislation of this nature, it would normally be the remit of the Departments of Finance or Enterprise and Employment. I welcome the commitment to the development of the Irish Financial Services Centre. While the provisions of this Bill will affect financial institutions, it will improve Ireland's competitive position and enhance the attractiveness of the International Financial Services Centre as a location for foreign companies.

The growth in the development of the IFSC since 1987 is a wonderful success story. In the debate on the budget I congratulated those who had the initiative and foresight to go ahead with its establishment, my party was then in power led by former Deputy Charles J. Haughey. The idea emanated from Mr. Dermot Desmond who put his head on the block and pushed the project forward. He is a friend and I am proud to be associated with him. His perseverance, with the support of the former Taoiseach. Deputy Haughey, demonstrated that Ireland — despite the fact that some people may have doubted we could become a major international player — has proved itself in this area.

As last year's figures show, there is now an enormous corporation tax yield — which has been increasing over the years — from companies within the IFSC. Ireland has taken its rightful place as the location of a major financial centre comparable with any worldwide, in the views of many foreigners it outranks the services available in the city of London, our nearest and major competitor.

Since the IFSC was established in 1987 successive Governments have committed themselves to supporting its development. Tremendous progress has been made since 1987, with the IFSC in Dublin becoming a fast growing, internationally recognised financial services centre. When the Taoiseach announced the establishment of Merrill Lynch in the IFSC last week it was known that the company was concerned that certain legislation was not on the Statute Book. I think I read some comment by the Taoiseach or Minister for Finance last year that this Bill would be forthcoming. It was brought about by the decision of Merrill Lynch Capital Markets Bank to locate in Ireland. I express a warm welcome to the company here, a bank which is an arm of the giant Merrill Lynch financial services group. Its decision to locate in Dublin was announced in December last. It has also been announced that the bank will locate initially in the Treasury Building prior to moving to the International Financial Services Centre. It is reported that in time the new bank will take over most of Merrill Lynch's non-dollar capital market activities, with employment increasing to 50 by the end of this year, rising to upwards of 75 by the second quarter of 1996.

It is extremely good news to learn that the IFSC captured such an impressive, well regarded United States giant, with the forecast that its employment levels will increase to 160 at full capacity. It is particularly heartening on the last day of session that we can eagerly anticipate the arrival of a company the size of Merrill Lynch locating in this centre. The sheer size of the company is breathtaking, its balance sheet is as large as that of City Corps., America's largest bank, employing almost 44,000 people, operating in 32 countries worldwide. It is well known that other European locations, including Zurich, were strong contenders for the Merrill Lynch operation, yet Dublin won.

Merrill Lynch pointed to the superb support and co-operation it had received from everyone here, at every level, including industry officials and the Government. Indeed the Chairman of Merrill Lynch congratulated the then Administration on its co-operation, working hand in hand with industry, in a constructive, productive partnership. Of course, other prime considerations in its final decision to locate in Dublin, over the well established financial and banking hub of Zurich, included our well recognised, available, educated and skilled workforce, incentive packages offered by our Government, advanced communications systems and the availability of high quality technological support. The decision by Merrill Lynch to establish a headquarters facility in Dublin is the largest project yet attracted to the IFSC, representing a landmark. We all hope that this decision of Merrill Lynch will induce many other financial institutions to view Dublin as a sound business location.

In excess of 240 operations have received primary licences to locate in the IFSC, which do not include 100 treasuries and 90 capital insurance facilities, managed on an agency basis by licensed operators in the centre. The development of the centre is due in no small part to the close co-operation between Government Departments and agencies, such as the IDA and the Central Bank, on the one hand, and local and international financial services institutions and professional firms on the other. I know that Dublin is being marketed by the IDA as a location for access to Governments, regulators being available, where there is a commitment to ensuring an environment within which financial services are promoted.

From my experience as Minister for Tourism and Trade I am aware of the need for a comprehensive marketing message to be delivered; we have the ready-made ingredients here at home. Companies considering locating here will be well aware of a number of factors which will encourage them: the highly skilled, well educated, computer-literate, flexible workforce. From my experience of travelling abroad, that is the biggest selling point when one mentions Ireland to foreigners. No matter where one travels when it comes to anything related to technology or finance, Irish graduates are at the top of their professions, they have given Ireland a name which must be the envy of others. Within the past month I met some international business people who told me they knew young Irish men and women, worldwide, heading various corporate institutions or treasury departments. They said those young people had given Ireland a tremendous name, resulting in all such international companies now seeking similar Irish graduates. They are our best ambassadors, much more effective than anything the IDA could do in attracting foreign firms here and their expertise is our best selling point. This means that any foreign company considering locating here knows it will have the requisite support and expertise.

It is nice to be able to boast about this because when one travels abroad and mentions finance, inevitably the response will be that Irish people head departments in the technology and financial sectors.

We also have a world class telecommunications system enabling us to transmit information globally, including satellite links with the United States and Europe. We no longer have exchange controls, there is a 10 per cent corporation tax rate guaranteed to the year 2005 and a range of favourable double taxation agreements with most of the world's trading nations, without any withholding tax on dividends and interest from the International Financial Services Centre. Those are just some of the unique advantages Ireland offers companies in these areas.

Unemployment is the most important item on the agenda of any Government and that of all political parties here. Consequently, the IFSC is ideally placed to play a major role in this respect. There are at present in excess of 2,500 people employed directly by IFSC companies, committed to the creation of an additional 2,000 jobs over the next five years. Of course, there is a spin-off in employment associated with these jobs, with potential for employment in accountancy, legal and other general service firms from the development of the centre. This Bill will be another component of the growing legislative framework which will improve our edge in attracting companies here and, in doing so, create many more jobs for our young people.

I should like the Minister to clarify a number of small points. Essentially, I suppose this Bill constitutes an interference with freedom to contract although, in this case, it is desirable interference; otherwise, bankers would require additional security against the possibility of losing out to another creditor say, in the case of bankruptcy yet this is being forced on us because ordinary judicial law has not moved with the times. Why has judicial law not moved with the times? Another question that warrants consideration is who may lose out if and when this Bill is enacted since its benefits will accrue to traders in forward and optional contracts? Therefore, is the price an increased likelihood of default on other loans by financial institutions? In addition, if the Central Bank is involved, does this represent a prime opportunity for the bank to be required to report annually on the level of trading of the type outlined in the Bill and its consequent implications for the Irish pound and economy generally?

One section of the Bill states that the provisions of the Gaming and Lotteries Act, 1956 do not apply to anyone operating in this field. I presume it is necessary to include such a provision because people operating in this field are, to use a loose term, engaging in a form of gambling. That is not to say that the people in the international Financial Services Centre are gamblers; I am sure they would be offended by any such implication. One must take a view, however, on how matters will arise in the future with respect to currency and the form of contracts. The Minister was wise to include this provision because at some time in the future a court might have interpreted some transactions as constituting gambling. Consequently, the provisions of the Gaming and Lotteries Act, 1956 would apply. One of the benefits of that Act is that a debt incurred under the Act is not legally enforceable.

I welcome the Bill and I wish the International Financial Services Centre success in the years ahead.

Like Deputy McCreevy, I welcome the Bill which is an appropriate one to bring forward. If there was any doubt as to the capacity of netting agreements to be enforced under Irish law, and if this was in any way an obstacle to the establishment of financial service companies here such as Merill Lynch and others, then it was proper and timely of the Taoiseach's Department to deal with this issue.

The law relating to setting off, in the context of insolvency and company liquidations, should be examined separately by this House and our time would be well spent in considering how the present judge made law in relation to setoff in the context of insolvency and liquidations is uncertain and unsatisfactory and could be the subject of a statutory restatement. Without detracting from the urgency or aptness of this Bill, the upholding of netting agreements in respect of financial contracts should not deflect us from reflecting on the fact that there are good grounds for reviewing the whole law in relation to setoff.

Deputy McCreevy asked why judicial law is not keeping up to date with developments. Do we want judges to act as legislators? They can only interpret the law we give them and we cannot constantly cast on them the function of closing loopholes and modernising our law. It falls, generally speaking, on this House to carry out that function.

I have a book of statutes at home which was published in 1702. Obviously, some ancestor of mine had it on a shelf because the penal laws are contained in it. Some of those are very interesting, for example, £5 horses not remaining in the hands of the Catholics, but among this set of Acts dating from 1695 was the original of the statute of frauds. It is amazing that that Act is still law. That is not the fault of the judges; it is our fault. I do not know whether the period of one year chosen for enforceability by the statute is appropriate in this day and age. It might be sensible to require long term contracts to be reduced to writing. We might now, 300 years later, examine that particular rule and the other rules in relation to the maximum value of contracts for the sale of goods that have to be put in writing. We might also examine the law relating to guarantees and warranties set out in the statute of frauds and ask ourselves whether that measure might not be revisited.

Contracts relating to the sale of land should be the subject of a statutory restatement. The 1695 Act in relation to that issue, and all the case law that has accumulated, has led to the present complex position whereby one must pore over various judgments of the courts to determine what does and does not constitue a written contract for the sale of land.

If we were to do anything in this 300th anniversary of the statute of frauds, we might set up a study, perhaps in the Department of Enterprise and Employment, to inquire as to whether that Act should be replaced by a modern statute which states clearly, in unequivocal terms, the contracts that are required to be put in writing and what constitutes a contract for the purpose of the statute of frauds. In relation to that statute, it must be remembered that judges invented a rule of part performance, to the effect that even if there was not a written contract, and if there had been a verbal contract put into effect to a material degree by the parties, the absence of written agreement was overcome by that part performance.

Deputy McCreevy mentioned the other provision in section 4 (4) relating to the Gaming and Lotteries Acts, 1956 to 1986. He made the point that there is an analogy between dealing in futures and gambling, and there is in one sense. There is also an analogy between insurance and gambling in another sense but my recollection of the Gaming and Lotteries Act defined "gaming"— and I presume we are not describing this as a lottery — as a game of skill or chance or partly of skill or chance for stakes hazarded by the players. It would be a very obtuse judge that would find that dealing in financial futures was a game of skill or chance for stakes hazarded by the players. To define it as a game might be colloquially acceptable in a pub but I do not think it would stand up in a court.

If it is thought necessary to exclude the Gaming and Lotteries Act in respect of the enforceability of a financial contract as defined in this Bill, there are other rules of law on gambling contracts and their enforceability which do not derive from that particular statute. It might have been wiser to extend the exclusion to any rule of law, either statute or common law, so that the enforceability of gambling debts would not apply.

The International Financial Services Centre has turned out to be a tremendous project. I should echo what Deputy McCreevy has said, that the credit for it goes to Mr. Charles Haughey who, as Taoiseach, pushed the project forward with great conviction and determination, and also to its originators, including Mr. Dermot Desmond and others. The scheme to provide employment opportunities for young Irish graduates at home, of which Deputy McCreevy was speaking, was clever and imaginative. It is an opportunity to bring worthwhile enterprise to Dublin. Without it, those companies would not have located in Dublin.

I wish the Minister of State well with its proposals to increase employment in the International Financial Services Centre. I am glad he has brought his customary energy, determination and feistiness to this project. There was a time when he devoted it to bringing the Olympics to Dublin. I suppose he still does because he will never admit defeat. However, he is on a far more certain bet here and his efforts will yield far greater returns. His idea of setting up an international consultative committee to try to draw in ideas and projects and iron out obstacles to the development of the centre is a very good one. Knowing his tenacity and single-mindedness, if he applies himself to this project, among his many other responsibilities, I have no doubt the Irish people will be well rewarded by the dividend from that ministerial effort.

This is obviously a worthwhile Bill which removes an obstacle which could have proved fatal to the Merrill Lynch project. I do not want to lose sight of the other point I made, that our law, 300 years old in relation to the necessity for written contracts, needs to be revised generally. Although it is sensible to tackle one problem by this Bill, the general problem still remains, that we are dealing with an antiquated law. To read the statute is very difficult, but if the Members of this House address their minds to the Statute of Frauds Act and realise that this is still a cornerstone of Irish commercial law 300 years later, they might be surprised by some of its contents. It is time to revisit the legislative underpinnings of finance and commerce. That it is 300 years old does not mean it is wrong but, from my experience, I know it is an uncertain law which could do with being tidied up and modernised. It seems a shame that we only consider doing so in the context of an immediate and pressing problem in one industry when there are many others where the same problem arises.

The banking industry generally was consulted on the preparation of this Bill, and I am glad of that. If the financial institutions come before the Government with an agenda for revision of outdated statutory rules on insolvency, company law, enforceability of contracts, etc., I hope they will not be given the brush-off because it would not be politically interesting or politically rewarding to face up to the need to modernise our statute law. I hope the message does not go out that a big player coming on the scene can have the law changed but the ordinary Joe Soaps must continue to labour under 300 year old antiquated laws because there is no political benefit in using the time of this House to achieve the necessary changes.

This Bill is being passed in one morning, and on the last day of the Dáil session. There are many other simple measures which could improve the commercial efficacy of this country which could be similarly passed in this House and in regard to which the Opposition, as far as I am concerned and, I am sure, as far as Deputy McCreevy is concerned, would equally co-operate. There is no reason sensible changes to our law which are non party political and which command general support should not be passed by this House in an hour or so from time to time in similar circumstances to these.

I thank Deputies McCreevy and McDowell for their contributions. I also thank Deputy McCreevy for his personal good wishes. I join with the Deputies in congratulating those who had the vision to take on this project. The former Taoiseach, Mr. Charles Haughey, played a major part, as did the other gentleman mentioned by Deputy McCreevy, and nobody should seek to take that away from them. There are probably many people who would have said the same thing about the International Financial Services Centre as they say about the Olympics. I do not understand for one minute why a Deputy should decide, without ever having done a study, that Dublin can never host the Olympics. If we allowed economists to rule this country we would not have had a Phoenix Park and we certainly would not have an international financial services centre. A study by some of the major business and sporting personalities in this city and country on whether Dublin will make an Olympic bid is well under way and will be published later this year. Any decision will be based on that study, not on the cynicism of the commentators who have put obstacles every inch of the way along my route. As it has been raised, the purpose of the Dublin International Sports Council is not simply to look at bringing the Olympics to Dublin, but at bringing in major international events which will reflect well on the country after 25 years of negative advertising, so that people will know this country for a country with attractions not just our tax regime but our qualified and able young people. That is something that comes through very strongly.

Deputy McCreevy asked why the Judiciary has not kept pace with the times. That was answered in part by Deputy McDowell, but my head spins when I hear some of the new ideas for hybrid contracts and funds. It must be difficult for the Judiciary to keep pace with them. It is a job we will have to do here.

This Bill will not restrict rights to contract but reinforces them. The Central Bank could report on the volume of trading in this area. We would need to check on the rights of access of the bank to pertinent information. As to who would lose, the creditors of the defaulting party may lose; equally the creditors of the other party will benefit. Trades in this area will be more stable if they engage in netting agreements and, it is hoped, we will avoid domino effects from the major failures of one party only.

I agree with Deputy McDowell that there is a need to review the Statute of Frauds Act, 1695 and I will bring that to the attention of my colleague, the Minister for Justice. Depending on the legislative timetable some of this law could perhaps be revised or reviewed. I would not suggest that Oireachtas committees introduce Bills, but they could at least give their view on some of these very old laws without waiting for an initiative from the Executive. I will also pass on the Deputy's comments on company law to the Minister of State, Deputy Rabbitte, who is examining the Bill. I do not know where gambling stops and hedging begins. However, I do know that chartered accountants deal with hedging and turf accountants deal with gambling. Perhaps that is how one recognises the difference.

Question put and agreed to.