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 Header Item Energy Bill 2016 [Seanad]: Second Stage (Resumed) (Continued)
 Header Item Energy Bill 2016 [Seanad]: Referral to Select Committee
 Header Item Single Resolution Board (Loan Facility Agreement) Bill 2016: Second Stage (Resumed)

Wednesday, 29 June 2016

Dáil Éireann Debate
Vol. 915 No. 3

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  8 o’clock

(Speaker Continuing)

[Deputy Denis Naughten: Information on Denis Naughten Zoom on Denis Naughten]  Deputy Rabbitte mentioned the Galway-Mayo duct. I do not believe it will form part of this Bill. It is disappointing that there has been a hold-up in the Office of the Attorney General with the drafting of the required amendments we need in this regard. The objective is to try to connect up towns such as Athenry. It does not just affect the ducting but also, as Deputy Collins mentioned, the national broadband plan. We are determined to drive that plan forward to bring high-speed broadband to every home in Ireland.

Regarding Ardnacrusha and the levels of water on the River Shannon, there are two problems in my constituency at the moment, one relating to flooding in a mountain and the other relating to turloughs. There is a particular problem in the far part of Deputy Rabbitte's constituency in south Galway relating to turloughs.

All the Deputies and Senators in the north east have spoken to me about the interconnector. I understand the point of view of Deputy Cassells and others. It is before An Bord Pleanála at the moment and we will get a decision later this year. I am very conscious of what people are saying to me and I am listening to them. We will all keep a very close eye on what happens in the next few months.

We have major challenges in the energy area, as articulated by Deputies Ryan and Dooley and many of the others speakers who contributed to the debate. We all need to try to work constructively together. As I said in the committee meeting earlier today, I feel that my Department is very much a facilitating Department in dealing with many of the issues relating to the climate change and energy agenda. We need to work with other Departments and work with communities rather than against them to drive the kind of change we need. I hope to be able to facilitate that as Minister.

  Question put and agreed to.

Energy Bill 2016 [Seanad]: Referral to Select Committee

Minister for Communications, Energy and Natural Resources (Deputy Denis Naughten): Information on Denis Naughten Zoom on Denis Naughten I move:

That the Bill be referred to the Select Committee on Communications, Climate Change and Natural Resources pursuant to Standing Order 141.

  Question put and agreed to.

Single Resolution Board (Loan Facility Agreement) Bill 2016: Second Stage (Resumed)

  Question again proposed: "That the Bill be now read a Second Time."

Deputy Eamon Ryan: Information on Eamon Ryan Zoom on Eamon Ryan If Deputy Donnelly joins us, I will share my time with him. He may have been caught out by the early end to the previous debate.

  I support the Bill before us. I realise it is largely technical in nature, but it provides an opportunity for consideration of the wider banking strategy in which we are engaged. I am happy to support something that arises from the lessons learnt from the financial crash and the need to have a common European mechanism to deal with the inherent instability that exists in our banking and financial system. The technical provision of this loan facility agreement is one of the mechanisms we need to ensure that if there is a similar crash in future, we would be able to cope in a better way than happened in our own circumstances.

  I use the occasion to broaden out the consideration and look back to the management of the financial crash in that period. I presume officials from the Department of Finance are in the Chamber. I commend the Department officials on the work they did throughout that period. They took a remarkably dedicated, hard-working and, in the end, effective approach to the financial crash. We got ourselves into a deep hole, but we managed to get ourselves out of it.

  One of the books on the issue, I believe it was Too Big to Fail by Anthony Sorkin, gave a blow-by-blow account of what happened in the Lehman Brothers crash. There was also Timothy Geithner's book on the stress test. It was a fascinating period in history. Too Big to Fail mentions that a number of commentators argued that in the management of a bank financial crash, such as the one we saw, there is a standard operating procedure to provide a guarantee, manage the assets and then capitalise. The expert commentary suggests an approach of halting a crash, trying to provide some certainty, managing the assets and then looking to recapitalise.

  We are still not yet out of that process. The political crisis in our neighbouring island will probably affect the proposed sale of AIB. We should have a debate, which could be very interesting, on what we intend to do with AIB. In a sense the management of this process is not finished. We will clearly not sell a bank into a market where bank shares have fallen by 20% to 30% in the past week.

  I put it to the Department that we should consider options in terms of changing, adapting and improving our banking system. The former Governor of the Central Bank, Professor Patrick Honohan, recognised that having managed our way through the process, we still have a gap in our banking system. We cannot go back to the three banks, AIB, Bank of Ireland and Anglo Irish Bank at the time, having €300 billion or €400 billion in capitalisation. We are not going to go back to having banks of that scale. Therefore, there is still a gap in our banking system.

  The most astute closing of that gap and, in a sense, the adaption and development of our banking system would be to run with a model of banking similar to what Germany has - the Sparkassen banking model, public banking system. The Government's partnership document refers to this, so clearly the Government sees it as providing a real opportunity. What I like about it and what would benefit us particularly is that it goes back to the core skills of banking with banks knowing their customers, business lending which is slightly above that in which a credit union would specialise and below that in which the big commercial and merchant investment banks would engage.

  That is the core for regional Irish development, for small town development and for development of our indigenous small businesses. It is a form of public banking involving a new ownership system, possibly local authorities. It is a model that works elsewhere that would be much less risky than what we have seen with the development of other banking models here and elsewhere. It would bring real economic benefits.


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