Banking Sector Regulation.

Dáil Éireann Debate, Thursday - 4 February 2010

Thursday, 4 February 2010

Questions (118)

Mary Upton

Question:

118 Deputy Mary Upton asked the Minister for Finance if, as part of his extension of the State’s protection to the banking industry here, he will demand that banks who wish to be regulated should be required to focus on either classic retail functions or on market actions; his views on whether such a distinction in the previous decade would have meant that the National Asset Management Agency would not have been required in view of the fact that those banks which speculated in the market would not be systemically important to the economy here; and if he will make a statement on the matter. [5923/10]

Written answers

Minister for Finance (Deputy Brian Lenihan)

The toxic loans in the Irish banking system are land and development loans and these are not the type of business that would be separated out by the proposals made by the Deputy. With regard to future regulatory changes, the Government is reforming the institutional structures for financial regulation to prevent a recurrence of inappropriate and unsustainable business practices in the financial services sector. We as a Government are moving forward through NAMA, the new guarantee scheme and the credit review system towards the objectives of maintaining a stable financial system and getting credit flowing to the real economy. These initiatives will contribute to the Government's number one priority, the creation and protection of Irish jobs.