Statements on the Recapitalisation of Allied Irish Bank and Bank of Ireland - 12th February 2009

Statements on the Recapitalisation of Allied Irish Bank and Bank of Ireland - 12th February 2009
Senator David Norris: The picture painted by Senator Ross is both accurate and grim. We have been confronted with an apocalyptic scenario. Good governance has been absent at senior levels in the banks, regulation has been poor, the banks have engaged in speculation on private accounts and mischarging of accounts and have provided assistance with tax evasion. The record is astonishing. Appalling investments were also made from which the taxpayer had to rescue them. That is the context in which the House debates this issue.
The following statement by the Minister of State is highly significant:

Importantly, statutory codes of practice on business lending and mortgage arrears have been finalised and will be published by the Financial Regulator this week. The codes will be put in place to ensure all banks operating here deal in an honest way with customers and that consumers in particular are treated in a reputable and respectable fashion.
What an innovation. How extraordinary. Does the Minister believe the banking system will survive this? Is this new? Suddenly, starting now, the banks will be honest and treat their customers in a reputable and respectable fashion. This is the measure of the utterly scandalous behaviour at the top of banks.
The €3.5 billion being given to each bank is certainly not enough. Every commentator we hear says it is not enough. When will it be enough? When will we have full disclosure? When will we know the extent of the exposure? From time to time, I listen to the economic analysis from RTE. George Lee is a most balanced, moderate man. One could hear from the tone of his voice last night-----
(Interruptions).
Senator David Norris: Those on the Government side are sniggering. I would not be laughing at this particular situation.
Senator Cecilia Keaveney: It was Senator Norris’s description of George Lee as balanced.
Senator David Norris: He is extremely balanced and he told the truth when those on the Government side concealed it. That is why they want to deride him. I have a lot more reliance on people like George Lee. Listening to the quality of his voice on the recording last night, there was despair, bewilderment and fury in it. That is what the people feel. If the Government does not get into tune with it, it will certainly find it will get its marching orders at the next election, if not before.
The Minister said the terms of the recapitalisation provide that each bank will have the possibility of redeeming up to €1.5 billion of the State’s investment by raising privately sourced core tier 1 capital prior to 31 December 2009. Let us hear the laughter from the Government benches. There is no laughter or sniggering because this is the most idiotic thing I ever heard. Who exactly will invest in these completely discredited institutions? This is on Bloomberg as we speak and is being reported all over the world. Who will invest? This is a completely empty thing.
We must look at this whole circular transaction. Apparently, the money originated in Anglo Irish Bank but from where it got it, I do not know. It then went through Irish Life & Permanent. I read this morning that, apparently, it was divided into two lots. First, €3 billion was put in, which was complete exposure of investors’ money as the guarantee scheme was not in place. Then when the guarantee scheme clicked in, it put in another €4 billion. This is endemic and is a disaster for the way in which we appear in the world.
The Dublin Docklands Authority invested in property speculation with Anglo Irish Bank and it has openly said it has not paid a penny in interest in the past six months. What is happening? Get all the toxic assets and dump them into Anglo Irish Bank. That is what it deserves as it has no reputation left and make it a national property management agency.