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Dáil Éireann debate -
Thursday, 29 Jan 2015

Vol. 865 No. 3

Central Bank (Amendment) Bill 2014 [Seanad]: Second Stage

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

The Bill before the House today was debated in the Seanad last week. That debate was very constructive and there was cross-party support and acknowledgement that the Government was bringing forward this Bill solely for the purpose of facilitating the work of the banking inquiry. In that respect, Deputies will have seen the very positive statement from the Chairman of the Joint Committee of Inquiry into the Banking Crisis last Thursday. He welcomed the tabling of the Bill which he said would enable the committee to have access to certain confidential banking information held by the Central Bank of Ireland.

The Chairman of the committee also emphasised that the purpose of the Bill was not to compel the Central Bank to co-operate with the inquiry but rather to remove a statutory prohibition in order that the Central Bank, which is willing to disclose information, is not statutorily barred from doing so. In fact, the Chairman of the joint committee went on to acknowledge the highly co-operative and constructive engagement the committee had to date with the Central Bank.

The Bill has two distinct provisions. First, it amends section 33AK of the Central Bank Act 1942 to allow the Central Bank to disclose confidential information to the Joint Committee of Inquiry into the Banking Crisis under certain circumstances. The information will be disclosed on condition that it remains confidential. As things stand, Central Bank officials are subject to professional secrecy requirements and could face criminal sanctions for sharing confidential information in this way. Second, the Bill provides for the Houses of the Oireachtas to make Standing Orders setting out the sanctions to apply to Members of the Houses for any failure to comply with these professional secrecy requirements.

On 14 May 2014, a joint committee of inquiry into the banking crisis, chaired by Deputy Ciarán Lynch, was established by orders of both Houses of the Oireachtas. The committee was tasked with the development of a relevant proposal for an inquiry into certain aspects of the banking crisis. The purpose of the inquiry is to seek to establish the reasons Ireland experienced a systemic banking crisis. On 26 September 2014, the committee submitted its relevant proposal to the Committees on Procedure and Privileges of Dáil Éireann and Seanad Éireann for the conduct of an inquiry in accordance with the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Act 2013 into certain aspects of Ireland's banking crisis. On 26 November 2014, the committee was formally empowered to conduct an inquiry under Part 2 of the 2013 Act. The scope of the inquiry as outlined in its terms of reference is broad and enabling. It is broken down into two phases, the context phase and the nexus phase. The context phase is for the purpose of information gathering. As Deputies are aware, the joint committee of inquiry has already begun this work. This will inform the nexus phase, which will focus on three broad elements: banking systems and practices; regulatory and supervisory systems and practices; and crisis management systems and policy responses.

I will refer to the interaction between the Department of Finance and the banking inquiry. The Department of Finance is fully committed to supporting the work of the committee of inquiry into the banking crisis, and this has been stated clearly by the Secretary General to the committee Chairman in a number of letters. The Department is currently in the process of sourcing, examining and formatting the substantial number of records requested by the inquiry. To this effect, a full-time central co-ordination unit has been established in the Department consisting of seven full-time staff. I should add that 11 staff from other areas within the Department have been reassigned to process the records in the format required by the committee. In addition, ten temporary clerical officers have been recruited to assist in the processing of records for the inquiry, which gives a total of 28 staff working full-time exclusively on banking inquiry matters. Furthermore, a significant number of Department staff are actively sourcing and examining records relevant to the inquiry's direction in addition to their normal duties. Moreover, the Department's Secretary General has communicated directly with the banking inquiry Chairman to ensure its direction to the Department is being met effectively. The Department is, therefore, clearly doing everything in its power to assist the banking inquiry in its work.

I will now explain the origin of the Bill being debated today. Section 33AK of the Central Bank Act 1942 contains an express prohibition under the Rome Treaty, the European system of central banks statute and the supervisory EU legal Acts on disclosure of confidential information. This is a long-standing prohibition, dating back to section 16 of the Central Bank Act 1989, which was ultimately replaced by section 33AK. All current and former employees of the Central Bank, including the Governor and members of the Central Bank commission, are affected by this prohibition. In its relevant proposal, the joint committee stated that section 33AK of the Central Bank Act 1942 would prohibit listed categories of persons within the Central Bank from disclosing certain confidential information. The joint committee felt this provision may therefore prove problematic for the banking inquiry when it seeks this information, which may in many cases be vital to the progression of the inquiry. Having taken legal advice on this point, the committee was of the view that it would be necessary to amend section 33AK to overcome this issue.

The prohibition on the disclosure of confidential information by the Central Bank is derived from the supervisory EU legal Acts and the statute of the European system of central banks. These EU instruments provide that where the Central Bank acquires confidential information in the course of its functions as a supervisory authority, it has an obligation not to disclose that information unless a gateway is provided under one of the supervisory EU legal Acts. The relevant supervisory EU legal Act in this case is the capital requirements directive and the gateway identified is the one allowing the disclosure of information to parliamentary inquiry committees. However, the obligation on the Central Bank not to disclose confidential information applies to all the Central Bank's duties and not just those imposed by the capital requirements directive. There is no definition of confidential information in the supervisory EU legal Acts, which instead refer to the concept of professional secrecy. It is entirely a matter for the joint committee to make the decision on the types of information which it requires from the Central Bank and for the Central Bank to decide on whether it can comply with the joint committee's request within the legal framework that applies.

In its relevant proposal, the joint committee further stated that ancillary amendments to the Standing Orders of Dáil Éireann and Seanad Éireann would also be required to put in place a process for how the Houses of the Oireachtas deal with confidential information and provide sanctions for Members who disclose such information without authorisation. The reason for Standing Orders to be amended is to accommodate the constitutional position of the privilege of Members of the Oireachtas, which restricts the extent to which criminal sanctions could be applied. In its consideration of the relevant proposal, the Committees on Procedure and Privileges considered that the preparation of the necessary amendments to section 33AK should be expedited by the Government.

As Members are aware, this banking inquiry will inquire into the reasons Ireland experienced a systemic banking crisis. It will consider at the political, economic, social, cultural, financial and behavioural factors and policies which impacted on or contributed to the crisis. In doing so, the joint committee may inquire into the findings and recommendations of previous reports into the crisis. Previous reports include the Honohan report, the Regling and Watson report and the Nyberg report. These reports identified that poor supervision, poor assessment of risks and a lack of follow-through on enforcement all played a part in the financial crisis. Acting on the recommendations contained in these reports, a number of significant reforms have been introduced to build a strengthened regulatory framework. These include the creation of a single fully integrated Central Bank of Ireland with a unitary board, the Central Bank commission; a regime to ensure the fitness and probity of key officeholders within financial service providers; a resolution mechanism to enable the Central Bank to intervene where a credit institution gets into serious difficulty and is in danger of becoming destabilised or otherwise failing; and strengthened powers for the Central Bank to impose and supervise compliance with regulatory requirements and to undertake timely prudential interventions.

A comprehensive overhaul of the regulatory framework in the financial sector has also been pursued at EU level since the financial crisis. Through the introduction of various initiatives, the stability and resilience of the financial sector has been strengthened. Ireland has played a key role in driving these reforms at European level, including the single supervisory mechanism and the bank recovery and resolution directive. The wide-ranging and comprehensive reform in the financial services sector at both domestic and EU level in recent years is to be welcomed. We must never return to the failed policies which led to the banking crisis. Lessons must be learned and, in that regard, this banking inquiry is essential.

Under the EU treaties, Ireland is required to consult formally with the European Central Bank on any new legislative provisions relating to the Central Bank. The opinion which was received from the president of the ECB was largely positive but the ECB made the point that the scope of section 33AK(6) of the Central Bank Act 1942 should be broadened to comply with Article 37.2 of the Statute of the European System of Central Banks. There is a duty of secrecy under the statute and that is why an amendment was brought forward on Committee Stage in the Seanad to broaden the scope of section 33AK(6) to provide for such obligations of professional secrecy. That amendment, which was approved by the Seanad, has the effect of removing any ambiguity over the scope of professional secrecy requirements pertaining to persons who would receive information disclosed by the Central Bank.

The banking inquiry will be examining the reasons Ireland experienced a systemic banking crisis which resulted in great upheaval for the Irish economy and the Irish people. Thankfully, we are starting to emerge from those difficult times. The macroeconomic and fiscal outlook is much more favourable than it has been for a number of years, exports are growing and consumer spending and investment are on an upward trajectory and the number of people at work has increased by over 100,000 since the low point. However, the Irish people have sacrificed much and the crisis has impacted heavily on their lives. They are entitled to understand the origins of the crisis and, importantly, the actions that have been taken to ensure the same mistakes do not happen again. That is why there is cross-party support for the banking inquiry and this Bill, which is designed to facilitate the work of the inquiry in getting access to information which otherwise would have been statutorily barred from disclosure.

I already mentioned the constructive debate in the Seanad and the cross-party support for the Bill. There was widespread consensus on a related matter also - that the costs of the inquiry should be strictly managed and that legal costs should be kept to a minimum. That is something we can all echo in this House. I thank the House for agreeing to take all Stages of this Bill today and I look forward to a constructive debate. I commend the Bill to the House.

I apologise in advance as I will be unable to wait for the full debate because of a previous commitment. Fianna Fáil will support the Bill, which is necessary for the orderly and speedy completion of the Oireachtas banking inquiry. It is important that the inquiry would have access to as much information as possible for its deliberations, and the risks that certain material pertaining to the Central Bank could have been excluded from the inquiry was identified by the committee itself as a potential significant limit on its work.

As the Minister has indicated, the Bill is largely technical in nature and the gateway that opens the limits is strictly in the provision of information for the purposes of the inquiry. My party officials thank officials from the Department of Finance who provided a briefing on the Bill yesterday, which helped clarify a number of implications of the Bill.

Again, we would like to acknowledge that the impetus for this Bill came from the banking inquiry committee and it is correct that this House would fully endorse the work under way.

The debate raises the wider question of the manner in which our Central Bank and the European Central Bank would account for the stewardship of the financial services sector in general. Unlike in other businesses, bank traders have, as we know, inflicted widespread economic damage on our country and on other countries. This explains, if it needs to be explained, why we need robust licensing and regulation. However, robust licensing and regulation have clearly failed and it is time the consequences of, and the reasons for, that are examined here, in the EU and, in particular, in the eurozone.

While the provision of documentation to the banking inquiry is one issue, more significant is the oral evidence that will be provided by those officials who are still in office or who were in office during the time of this regulation failure. Their oral evidence and their willingness to be challenged on that evidence will provide some of the crucial information we need for this inquiry to get to the source of this. As the Minister of State said, previous reports have indicated that there were serious failures in regulation and supervision. However, it is noteworthy in that context that the 2007 general election was not dominated by calls for more banking regulation. There were no major policy debates or statements about banking regulation during that campaign. The inquiry needs to be in a position to give the unvarnished account of the history of regulation and of why regulation changed so much during the early part of the past decade and why it then failed the citizens of this country so spectacularly.

It is important also that the committee examines the extent to which the Central Bank used the powers available to it, both soft and hard powers, and why the Central Bank's and the regulator's actions were insufficient to prevent the crisis from developing. We all wish the committee well in its endeavours and we want to ensure this legislation is signed into law as soon as possible in order that the inquiry team can use its provisions.

Co-operation with the Central Bank is one thing, and the Minister of State laid out the significant investment on the part of his Department in terms of staff and personnel. However, the issue of ECB participation in the inquiry is still unresolved. Its refusal to participate fully and to respect the democratic mandate of this House is an affront to this Parliament and to those of us who serve as representatives of the people. The terms of reference of the banking inquiry specifically provide for an examination of the role of the ECB and, therefore, I cannot understand why we still have not resolved the full extent of its participation or why it does not seem to appreciate its need to be here to answer questions from elected parliamentarians of a national parliament on its dereliction of duty. Its argument is that it is only responsible to the European Parliament. However, in this case and on its watch, significant and horrific damage was caused to the people of this country and it needs to account for its role in that.

The notion that former ECB President, Mr. Trichet, would agree to a meeting with a representative group of MEPs is a completely inadequate response. Our MEPs are an important part of the Parliament but we have established an inquiry team and have put significant resources into the banking inquiry, and Mr. Trichet should deal directly with the directly elected members of that inquiry team.

As a party, we do not agree there is a legal prohibition on Jean-Claude Trichet or on any current or former ECB officials appearing before our banking inquiry. It is imperative that all members of the inquiry have a full opportunity to examine all of the key issues, and that includes direct questions and direct interactions with Mr. Trichet and any officials who were or are still involved.

Members of the inquiry can only consider evidence presented to them directly when they come to writing the report. Therefore, information put through third parties or intermediaries, whether MEPs or otherwise, is devalued. Its admissibility as evidence and the ability to test the evidence, which is essential for any inquiry, would also clearly be flawed. The notion that Mr. Trichet or any official of the ECB, including President Draghi, would appear before a representative group of MEPs is basically a smokescreen. The Government should not accept it and should demand that the ECB respond directly to the directly elected Members of the Oireachtas who, in turn, must respond to the people who are suffering the consequences of banking collapse.

The notion that the efforts of two successive Governments in 2010 and 2011 to impose losses on senior bondholders were rebuffed by the ECB is well accepted. The insistence of the ECB that all bondholders be repaid in full has cost this State many billions of euro. At the end of the original bank guarantee in September 2010, a total of €20 billion of unsecured senior bank bonds came out of guarantee, including almost €5 billion in respect of the former Anglo Irish Bank and the Irish Nationwide Building Society. They were repaid in full because the ECB demanded that and now it wishes to avoid being held responsible for the reasons it inflicted that loss on the people.

I welcome the measures in this Bill but this inquiry will not have the strength to get to where it needs to get while there continues to be dodging on the part of the ECB. I ask again that the Government flex its muscles and rather than accept half-participation, which will be flawed and where the evidence would surely be contested, that it stands up for this inquiry into which it has put so much and demand that the ECB appears in Leinster House before people directly elected in this State. If we are to have a good inquiry and if, as we all agree, we are to learn the lessons, then nobody can avoid their responsibility.

I refer to the issue of professional secrecy. Will the Minister of State clarify that there is nothing in that amendment that would block anybody from actually being called before the inquiry and that there is nothing in that clause which would allow former staff of the Central Bank and former ECB people to escape from appearing before the inquiry and that they will be allowed under this Bill to answer for all of their actions as officeholders in any of these institutions? Will he clarify whether there is anything, inadvertently or otherwise, contained within the provisions of the amendment that will be used to avoid answering for specific actions which may, in the view of the inquiry, have contributed to the banking issue? I would appreciate those clarifications.

We also welcome the Bill and will facilitate its passage through the House today. We recognise that the Government has introduced the legislation in response to a request from the Chairman of the committee, and has done so pretty quickly. As the Minister of State outlined, it was debated in the Seanad last week and is in this Chamber today. I think all Stages are being taken today, which is important. The Bill will assist the banking inquiry in its efforts to get to the heart of what happened in terms of the guarantee, which is important. It will also help to speed up the process of collecting the information and evidence - a process which is already under pressure due to the delay in establishing the banking inquiry. The Minister of State would probably disagree but should the Government fall in the morning or next week, then the banking inquiry will also collapse, so time is of the essence here and that is why we welcome the legislation.

The Minister of State pointed out that the banking inquiry will examine the reasons Ireland experienced a banking crisis that resulted in great upheaval for the Irish people. That is important because not only will the banking inquiry look at what happened, but it will also ask why it happened. That is important because it is not as straightforward as sometimes the narrative portrays. For a start, we seem to be in a situation where why it happened is assumed and is almost obvious. On the face of it, the question of why the bank guarantee was given appears to be one of liquidity but when one examines it more closely, it is a case of solvency. We all know the consequences of the guarantee. As a result of the guarantee, the Irish people are liable for the losses in Anglo Irish Bank and Irish Nationwide Building Society. The explanation goes that it was a desperate mistake to have made, a fatal blow to the health of the nation, but the apologists would ask what could we do for the decision was taken with no malice intended.

The situation was compounded by the actions of the European Central Bank which, after September 2008, issued billions of euro to the Irish banking system via the purchase of Irish bank bonds, the creditworthiness of which was underwritten by the State guarantee.

In November 2010, the ECB, along with other members of the troika, effectively moved into and took over the Department of Finance so as to ensure that no bondholder, including themselves, was left behind. In the words of the apologists, it was all down to a desperate mistake. They tell us there was nothing that could have been done, that that is just the way it was and that we need to move on and get on with it. The narrative, ultimately, is that decent people made desperate decisions in dire circumstances and that there was no other way out of it. In that regard, one of the jobs of the committee is to establish the "why".

It is important to stress that the guarantee decision cannot be waved away as a case of political naivety on the part of the previous Government. It is possible to say that with some confidence because of the questions asked to date at the banking inquiry, including those by my own colleague, Deputy Pearse Doherty, and because of some of the answers given by the witnesses who have appeared before the inquiry. We know that from at least September 2007, with the Northern Rock crisis, the authorities and the Government parties were discussing financial crisis management tactics. That means that for a full year before the bank guarantee was approved by the Cabinet there had been conversations at the highest level within Government about what to do if or when an Irish bank was threatened with illiquidity or insolvency issues.

We also know from evidence given by Professor Ed Kane of Boston College that when we talk about a bank being too big to fail, what we are really talking about is a bank too powerful to fail. In his opening statement to the inquiry Professor Kane said that a government's willingness to rescue a certain institution lies in the links between that institution and the political elites. That is important because it goes to the heart of the matter.

When we consider what happened in terms of Ireland and the bank guarantee, the one element missing from the official report so far, and the one that has been down-played by the previous Government and this Government, is the links between finance and politics within the State. The other element is property speculation, in particular, commercial property speculation, in terms of the bad loans that made up the bulk of the debt transferred from the banks on to the Irish public via the National Asset Management Agency, NAMA. That is where the "why" becomes relevant once again. Once we start to examine the bank guarantee in the context of the relationships between property, finance and the State, the "why" of the bank guarantee takes on a different colour from that of the asleep at the wheel narrative that is so often put forward by the previous Government.

We know from evidence given to the Committee of Public Accounts by Brendan McDonagh of NAMA that 90 borrowers taken on board by the agency had collective debts of €62 billion. In terms of the Anglo Irish Bank loan book, just 20 borrowers accounted for over half of its value, and the value of loans to the top 25 customers of Irish Nationwide represented 51% of that institution's commercial book.

We know where the power lies within this State. It is within the nexus of finance, property and political influence. It is to the credit of the banking inquiry committee that this nexus is at the core of the operation of the inquiry. For that reason we welcome this Bill and will assist its passage through the House today because the task of the committee is of great public importance. People have a right to know what happened because they continue to suffer as a result of the bank guarantee, with that onerous debt being placed on their shoulders. Not only should we know what happened, but why it happened.

The next speaking slot is shared between Deputies Richard Boyd Barrett and Shane Ross.

On the face of it, this Bill is straightforward and it should be supported. I thank the Department of Finance officials for briefing myself and Deputy Donnelly the other day. The Bill appears to be uncontroversial. As I understand it, it is a Bill to ensure that the banking inquiry can gain access to all the information it might wish to access in the context of that inquiry from Central Bank officials who might otherwise be prohibited from giving it out. In the normal course of events, if those officials gave out information to people they should not give it to, they could be subject to criminal sanction but if Deputies disclosed that information and breached the secrecy and confidentiality clause, they would not be subject to certain penalties because of the privilege they enjoy. There should be some penalty regime, therefore, or we should be subject to the Standing Orders of this Dáil regarding sanction. I have not seen the details of those Standing Orders but I understand that, for example, a Deputy could be put out of the Dáil for eight days, which is not the most punitive sanction I could imagine. There are times when I wish I was put out for eight days.

That will probably not act as a great inhibitor for disclosing information that might otherwise be protected by a confidentiality clause but, critically, it is legally necessary for the banking inquiry to be able to access all the information it might want to access to get to the bottom of the banking crisis in terms of why it happened, who was at fault, the systems failures and so on. For those reasons, one would support it.

The only issues worth discussing in the context of this Bill are those that arise from it, which I find interesting, and that occurred to me in the context of the departmental briefing, that is, why are some categories of information within the Central Bank subject to a confidentiality clause and, in some cases, criminal sanction if that information gets out? That is an interesting question against the background of a banking crisis which was caused by a nexus of relationships involving developers, banks, politicians, the Central Bank and regulators both at a national and a European level. All those people had some involvement in the nexus of relationships, or what some of us might call the golden circle or the elite. They decided what happened and they oversaw the banking and policy regimes that produced this catastrophic economic crisis that has had such devastating consequences for millions of our citizens, who are still paying for the mistakes, and possibly the wrongdoing, that produced that crisis.

That begs the interesting question about transparency and why we need confidentiality when it comes to information that can have such devastating consequences for citizens who will never be able to access that information but who are the victims of decisions that were made behind those confidential barriers. One manifestation of all of that is the refusal of representatives of the European Central Bank to come before the banking inquiry. They say they are not allowed to do that and that they are only accountable to certain people. It is because of the European Central Bank that we are subject to certain confidentiality clauses in the first place in terms of information we can access from our own Central Bank.

Why is any of this information confidential at all? I appreciate that there might be categories of information held by the Central Bank that should be confidential. For example, I do not see any particular reason the deposits of ordinary deposit holders should be public information that can just be thrown out willy-nilly. I agree that private and personal information on loans that are given to ordinary bank customers of banks for house extensions, cars or holidays should be subject to confidentiality. The customers of the banks should expect such confidentiality. However, the banking inquiry will be looking at some very different categories of loans, including the reckless commercial loans that were given to a relatively small number of big developers. The activities of such people, who were driven by the profit motive, commercial interests and the desire to accumulate personal wealth, bankrupted the country and cost us so dearly. I suggest not only that the banking inquiry should have access to such information, but also that everybody should be able to access it.

I would like to know a little bit more in this regard. I do not know the extent to which the Minister of State can illuminate these areas for us. What categories of information will be covered by this measure? When I was discussing with the departmental officials the sorts of categories with which there might be problems, they gave a good example. It might be interesting to know the top ten, top 50 or top 100 big commercial property exposures of the big banks that wrecked the economy and went bad. Frankly, I think we are entitled to know that information. I am not sure whether we are being given such an entitlement, however. Could people be subject to a penalty if they disclose this sort of information in the Dáil? I would like to know about the hundreds of millions in loans that were given out to a golden circle. It is clear that normal prudential lending practices, such as proper risk assessment, were not adhered to. On what basis were these loans given out? Who was giving them out? Did people give loans to massive developers over and over again on a nod and a wink basis because they were mates, were part of the same golf clubs or had the same political connections? The public is entitled to ask for such information. I wonder about the confidentiality and secrecy rules that might prevent information we have every right to know from getting into the public domain.

Like every speaker, I share the desire for the banking inquiry to go wherever it feels the need to go and the appetite for frank answers to an unlimited number of questions. Just as we have been told it does, this Bill addresses the problem encountered by the banking inquiry when it has hit a brick wall while seeking certain information. I think the Bill should be supported in that sense. If the banking inquiry were to hit a brick wall when looking for information that is vital to its conclusions, then the doors that need to be opened to allow the inquiry to access such information would have to be opened. I was very suspicious when I found that some sort of conspiracy will ensure this information will go no further than the banking inquiry. The people who will be allowed to access this information will not be able to share it with us or with the general public. They will have to keep it to themselves. We need to consider how that will affect their ultimate conclusions. How can we reassure the public that the banking inquiry has credibility - there are many question marks in this regard at the moment - and is coming to conclusions which are equally credible if we do not know the basis on which these conclusions have been reached? Perhaps the Minister of State can enlighten me on this.

It seems to me that the banking inquiry is going to ask some very pertinent questions - we do not yet know who will be asked those questions - and is going to get answers to those questions behind closed doors before reaching conclusions as a result of those questions. I presume they will share those conclusions, but I know they will not share the evidence with us. If we do not see the evidence on which those conclusions are based, they will have absolutely no credibility whatsoever. I cannot say I would trust anybody - I do not mean this in a disrespectful way - to reach conclusions of such import as this inquiry is going to reach if they are not going to show me the evidence on which those conclusions are based. The idea that the banking inquiry will somehow operate in an important way in secret means that some of the pillars of credibility it has been given by some of its activities and some of its proponents will be removed. While I accept the introduction of this legislation in order to let the information out into the public, I thought we would all be able to share it. I think the idea that we are going to compromise the Deputies involved by asking them to keep this information a secret discredits it as well. I may well be wrong - only time will tell - but it makes it look like there is some sort of conspiracy to protect certain people from information coming out about them.

I echo what Deputy Boyd Barrett had to say. I do not think there is any reason to allow information about the current or deposit account activities of small depositors to be released. I cannot see where there would be any need for that. I doubt if that is the information the committee will be looking for. I may be wrong, but it seems to me that the information it will be looking for will relate to the big players in this crisis, from which we have suffered for so many years.

The important thing is that is the exact information that should be shared with the public.

The Deputy was a cheerleader for some of them once upon a time.

The public is entitled to know what the bankers, developers and other big players were up to in that period. It is material. If the information being sought from the Central Bank in particular is not revealed, it will look like those people are being protected under the 1942 Act for some reason. An additional question arises in this context. Is it really correct that politicians should be carrying out this inquiry? Given that politicians are answerable to the public, should they be compromised by being asked to keep secrets? Our job and the job of those who are part of the banking inquiry is to expose what happened to the public in the most open possible way. If politicians are asked to be part of that conspiracy, that will do a disfavour to the body politic as well. I suppose everybody in this House knows that politicians are not the most discreet with confidential information.

The Deputy can speak for himself.

Everybody knows that anything that comes to a certain number of politicians will leak. It will get out regardless of whether penalties apply.

Aithníonn ciaróg ciaróg eile.

The Deputy should not bring us all down with himself.

The imposition of fines, penalties or absences from the House for that is irrelevant and absurd. The information that we are trying or pretending to try to keep confidential is undoubtedly going to leak out to the press sooner or later. I will give a recent example. We were all told that a highly sensitive document that had come to the Committee of Public Accounts, of which the Minister of State and I were both members at one time, should not appear anywhere.

I am referring to the Ansbacher case in which people were wrongly named. That document had only been released for approximately 30 minutes before it was all over the media and the Internet and was in the newspapers the next day. Politicians do not keep secrets. To impose a cosmetic penalty on them, which will apparently be the case under this Bill, will not be effective. It is only a fig leaf. It would be better were the information readily available in its raw form instead of in a spun way, as it undoubtedly will be, that would probably affect the inquiry more adversely than were it to be released initially.

Deputies Fitzpatrick and Creed are next, with five minutes each.

I broadly welcome the Central Bank's common sense and fair approach to the issue of mortgage deposits, particularly those required by first-time buyers, as part of a responsible approach to mortgage lending now and in the future. I have often been asked why the Central Bank was introducing these measures. The result of the new regulations will not only be to increase the resilience of the banking and household sectors to the property market, but also to reduce the risk of bank credit and house price spirals from developing in future.

It should be noted that the Central Bank is independent of the Government and the Oireachtas. In recent months, I have had a great deal of contact with my constituents in Dundalk and its surrounding areas, including Ardee, Dunleer and Cooley, regarding the issue of mortgage deposits. First-time buyers were concerned that they might be prevented from getting on the property ladder. They had read reports that, among other stipulations, they would be required to have deposits of 20%. This caused them great stress.

The Central Bank's announcement that a 10% deposit would apply to first-time buyers was welcome, especially given the fact that most such buyers in County Louth, Dundalk and Ardee in particular, would fall under the proposed €220,000 limit for 10% deposits. I have examined how these proposals would impact first-time buyers purchasing a property valued at €220,000. The new regulations will allow a maximum loan-to-value figure of 90%. In practical terms, this means that a first-time buyer purchasing a property valued at €165,000 would require a deposit of €16,500, with a maximum mortgage of €148,500. For properties valued at more than €220,000, the maximum loan-to-value mortgage will be 90% of the first €220,000 and 80% of the balance. For example, the maximum loan granted to a first-time buyer purchasing a property valued at €250,000 would be €222,000 and the deposit required would be €38,000. These new regulations are equitable and fair and will protect all first-time buyers.

Like the rest of the country, we in Dundalk, Ardee and Dunleer were badly affected by the property crash, with house values on average falling by more than 60%. Sadly, some families that purchased at the height of the property bubble, many with 100% mortgages, will be in negative equity for the foreseeable future. We all agree that this situation must never recur. The measures being taken by the Central Bank will go a long way towards ensuring this and will prevent us from returning to the unsustainable lending practices of the Celtic tiger era, when 100% mortgages were regularly given to first-time buyers. In many cases, mortgages of more than 100% were given. Despite the low interest rates of the time, this was never going to be sustainable. Unfortunately, many of our citizens are now paying a heavy price.

The new measures will bring stability to house prices and prevent a rapid increase. At the height of the bubble, Dundalk saw prices increase unsustainably quickly. For example, a standard three-bedroom semi-detached house would have cost more than €200,000 in 2007 compared with approximately €45,000 in 1997. Had the new controls and regulations been in place ten years ago, Ireland would not have endured the worst economic crash in our history.

I welcome the legislation and the opportunity to contribute on it. I thank the Minister of State for his informative remarks. On the face of it, the Bill is straightforward legislation that facilitates the working of the banking inquiry so that it might have access to all information relevant to the banking crisis that engulfed the nation. Fortunately, we are beginning to emerge from that carnage.

As an aside, while the cost of the banking crisis to the taxpayer was considerable, I am often struck by how we do not have an inquiry into the general state of our economic collapse, for example, the collapse in employment and the cost to the taxpayer and society at large, which was much more significant in financial terms than was the cost of the banking collapse.

I wish the members of the banking inquiry all the best in their endeavours to get to the bottom of the crisis. They do the public some service in the task they have undertaken. It is onerous not just in terms of the minutes and days spent in committee meetings, but in the preparation, reading and interpretation of what I suspect are often turgid documents that are required.

In terms of making as much information as possible available to the inquiry, the amendment to section 33AK of the Central Bank Act 1942 is welcome, but something that is not before the Dáil today is the question of how the House proposes to deal with sanctions on Members with access to that information. It is high time that the House had a debate on parliamentary privilege. It is not an absolute privilege, although it is taken by many to be so. We must be cognisant of third party rights. A Deputy referred to one of the most recent breaches, in which third party rights were disgracefully trespassed upon in the Chamber using information that was laid before a committee alleging that certain people held offshore bank accounts. It transpired that these allegations were bogus in most, if not all, respects.

Under the current sanctions regime or any strengthening of same that might be countenanced, what is to stop someone involved in the banking inquiry who gets access to sensitive information from repeating it chapter and verse in the Chamber and dressing it up as a great public service? We are building an edifice on an understanding of parliamentary privilege that appears to be based on foundations of sand. I appreciate that, to many people, this is an academic observation. While it is important that this House never be gagged, it is also important to realise that our privilege of free speech is not an absolute one. I suspect it does not need to be legislated for, as that would give a role to the courts in matters that, under the separation of powers principle, are parliamentary in their nature, but the House needs more teeth to deal with Members who abuse privilege.

Deputies Ross and Boyd Barrett were at a loss as to what information the Central Bank might have that could not be put in the public domain. I am not a banking expert, but I suspect that there is a significant volume of sensitive information that, if it were to be put into the public domain, would not be in the public interest. For example, a critical piece of information at the time would have been on the flight of capital out of banks. Deputy Ross was a cheerleader who eulogised one of the country's leading bankers and espoused the Anglo Irish Bank model as one that the State should have embraced wholeheartedly. At one stage, Deputy Ross advocated one of the principal players in Anglo Irish Bank for promotion, if not to Governor of the Central Bank, then to governor of Bank of Ireland.

God help the taxpayers and society at large if Deputy Ross's contributions in those days on the back pages of the Sunday Independent had been acted upon by any government. I know that Deputy Ross would like to present himself today as the Messiah in waiting, with an alliance of others, to save the nation. However, I do not think his track record bears much scrutiny in respect of probity in financial matters or how the State should have proceeded.

It is abundantly clear that many Members of the House could not hold water in terms of sensitive information and would be in a rush to put it in the public domain. We need to seriously examine privilege in this House and how it is used and abused. In addition, we need to look at how we can have real teeth and sanctions for Members who abuse that and, in so doing, abuse the public interest.

I welcome the opportunity to speak briefly again on this timely Bill. Society is now moving into a phase in which many questions are arising from the trauma of the past. As people start to get to grips with our past and face the future with more confidence, those questions need to be answered.

While I welcome the emphasis on the banking inquiry and the good work that will no doubt be done by that committee, a number of issues arise therein and we must look at the bigger picture. Many more questions remain to be asked about the overall impact of decisions and attitudes that evolved and developed during that time. The reality is that while the banks' collapse has been an enormous cost to us, it still represents only about 20% of our national debt. Therefore, around 80% of our national debt - the same debt that has crippled us financially for many years - also has the potential to cripple future generations when it must be paid back in full. I hope we will not lose sight of that by focusing all our energy on the banking inquiry.

I fear that a lot of time, energy, focus and effort will go into the banking inquiry at the expense of some deeper questions that need to be asked. One reason for this is the role the media will play in this regard. They will ensure it is popular to beat up the banks. In the past 24 hours, I heard someone in the media referring to paying back the bondholders €8 billion to €9 billion a year for bank debt. I presume the person was referring to the cost of interest on our borrowings, but 80% of those borrowings have nothing to do with the banks' collapse.

We should examine the role and function of all partners and players across society, including in politics and the media, in the run-up to this crash, especially as we see it being replicated today. RTE's "Morning Ireland" radio programme sets the agenda for the day. It always strikes me as peculiar how Leaders' Questions are effectively written by the producer of "Morning Ireland" every day. Parliament meets to discuss what is to be done but instead of being proactive, courageous, visionary and showing leadership, we are all caught up - led by the Opposition - with the questions of the day that appear on newspaper front pages or on "Morning Ireland", which admits to setting the agenda for the day. That is not as helpful as it could be.

The relevant committee is conducting the banking inquiry, which is timely, but as a Parliament we need to reassess and evaluate how we can better enhance our future role, while learning from the past and looking to the future. We should also look at the political decisions that were taken at the time.

In my constituency, a new initiative was set up at Christmas in the village of Leap in County Cork, called Leapland. I was talking to the proprietor recently, who said he had a great run at Christmas time. He had a huge influx of people and a lot of turnover, so he took on part-time staff. Under the previous government we set up our own little Leapland, but instead we took on everybody for a full year, never realising that takings would drop as soon as the Christmas season was over. In that case, the equivalent of Christmas was the silly season of a building bonanza, yet we have been left to carry the cost of that fatally flawed mistake. That has had an impact on 80% of our national debt, which is the gift we will keep on giving to future generations - our children and their children.

Perhaps we therefore need to widen the scope somewhat and allow the inquiry to examine not just the banking collapse but also the role of this Parliament's Members - individually and collectively - so that we can learn from the past. We should ask what we are doing to ensure that we do not make the same mistakes again.

I thank Deputies on all sides for their contributions today. This is a short Bill but we are all agreed that it is an important one. The joint committee of inquiry has identified these amendments as being necessary to enable it to do its work. It is important for all sides of this House to respond to that in a timely manner, as Deputy O'Brien said. When a request is made to enable an all-party inquiry to do its work, the Houses of the Oireachtas must act efficiently to assess that request and help where possible. That is what we are doing today and what the Seanad has already done.

The Chairman of the joint committee has stated that, once enacted, the legislation will provide access to Central Bank information for the committee's inquiry team. The joint committee will use this information to review and question the causes of the crisis, the crisis itself, and post-crisis actions. This is the first time that such access has been granted.

We have had a debate about confidential action, but this Bill is not making anything confidential or changing the status of matters that have been deemed as confidential by the Central Bank. We do not have the ability here to undo an EU legal framework on confidentiality and the Central Bank's structures. We do have the ability, however, to provide gateways enabling the committee to receive information that it otherwise could not access. That is the importance of this Bill. I have faith that the committee, as its Chairman has already outlined, will treat the information with the highest levels of confidentiality. Processes have been put in place, including a risk assessment, by the committee on how best to deal with that information.

I would like to respond to some of the issues that have arisen during the debate, one of which concerns the ECB. I understand there is still a possibility that the ECB will be able to contribute to the inquiry in some context. I have clearly heard the views of Members on this point. I am informed that the Chairman of the joint committee has written to the Governor of the Central Bank proposing a meeting to discuss the options available.

The most important element of the banking inquiry is its ability to obtain relevant information and documentation to support the inquiry process. It is quite important that we respect the independence of the inquiry in terms of how it wishes to go about its work. The Chairman has put in train a series of measures, including meeting the Governor of the Central Bank to explore opportunities concerning the participation of the ECB. I wish that process well.

Deputy Calleary asked if the Bill provided a basis for non-co-operation. It absolutely does not. The Bill opens a gateway and allows for the sharing of confidential information by current and former Central Bank officials. It enables, rather than inhibits, co-operation. The amendments before the House today remove an obstacle which had been identified by the banking inquiry.

I agree with a lot of what Deputy O'Brien said, including the fact that "What next?" is as important a question as "Why?" It will be a matter for the banking inquiry, but I am pleased to note that this is the route being taken. He talked about the link between finance and politics, which is an important point. I contend that we have taken a number of steps in the lifetime of this Government, to date, to try to break that link. They include reforms regarding corporate donations, State board appointments, and the new Lobbying (Registration) Bill. They are all important elements that we either have debated or can debate in this House on breaking that link.

Deputy Boyd Barrett asked why this information was confidential in the first place. I respectfully suggest that some of the questions Deputy Boyd Barrett asked would be better directed to the banking inquiry. It falls within that inquiry's remit to provide answers concerning the Central Bank and other State agencies' interaction with each other during the crisis and in the lead-up to it. From a factual and legal viewpoint, however, it is important to state that under the EU supervisory Acts the information collected by the Central Bank is subject to confidentiality. We are not in a position to alter that today because this country is bound by an EU legal framework.

What we are in a position to do today is put in place these gateways in order to allow the committee access to information. I reiterate what I said during my initial contribution to the effect that the Central Bank is co-operating with the committee, and the latter has acknowledged that fact. The legislation is designed to allow the bank to co-operate further.

Deputy Ross argued that there is no credibility if everyone cannot see the evidence. Perhaps it is the journalist in him, but that is simply not true. I do not believe people would dismiss the Honohan report as being anything other than a substantive item of work. Professor Honohan and those who compiled other reports made the point that supervisory problems existed. They did not need to say that whether supervisor A expressed concerns about bank B. We can have trust and faith in the process and in the fact that those elected by the people of this country who are serving on this inquiry on our behalf can assess information and present findings from which we in the Oireachtas can learn.

Deputies Creed and Jim Daly made a very fair point in respect of the broader economic collapse. The banking crisis was a massive factor in the context of the economic difficulties experienced by this country. However, it was not the only factor. Fiscal and economic policies pursued over a sustained period were also to blame. The introduction of a spring statement by the Government will provide the House with another opportunity, in advance of the budget, to examine the current economic circumstances of the country. It will also provide an opportunity for structured debate in respect of spending plans going forward. In that sense, it is welcome. I join the Deputies in wishing the Joint Committee of Inquiry into the Banking Crisis well.

I thank Deputies and the Members of the Seanad for facilitating the speedy consideration of the legislation in both Houses. I again commend the Bill to the House.

Question put and agreed to.