Joe O'Reilly: Explains bank guarantees, supports legislative tidy-up

At the outset, can I join with you in welcoming Minister Macconnell to the House. At very different times, and he would want that emphasised, we attended the one educational institution and played fairly similar roles there, but there is a very big gap in time, in case he interrupted the proceedings to get that on the record. The Credit Institution Financial Support Act of 2008 enabled the then Minister for Finance to enact the Bank Guarantee Scheme. The EU Commission approved the Bank Guarantee Scheme, and I quote, as being necessary to remedy the T-scheme. The EU Commission approved the Bank Guarantee Scheme, and I quote, as being necessary to remedy the serious economic distress in Ireland. After approval by the Houses of the Oireachtas, it was introduced by way of a statutory instrument. The Credit Institution's Financial Support Scheme Statutory Instrument 4.11.20 of 2008. It set out the terms and conditions, and had a life of two years guaranteeing all deposit liabilities, including retail, commercial, institutional, institutional, and all covered bonds, and senior debt and subordinated debt. This, in essence, in simple terms, is guaranteed at a critical stage, at a time of great peril, the savings of individuals right across the country, and that was crucial among the rest of the things I said. It was followed by the Eligible Liabilities Scheme in December 2009, with less extensive cover. In 2013, the Minister announced that the ELG would end for new liabilities, so we were, if you like, weaned away. It is, of course, important to note that the majority of deposits continue to be guaranteed. This is a critical point that somebody watching this online, or whatever, or on Oireachtas TV, needs to be reassured, or to have it read into the record, that retail deposits are still guaranteed to a maximum of £100,000, and joint deposits to a maximum of £200,000. So there is, effectively, a guarantee there yet. The guarantee schemes had conditions at the time, and the conditions included restructuring of the boards, board representation, commercial conduct, and remuneration and reporting. So those restrictions were naturally built in to the financial guarantees. These obligations have become redundant due to there no longer being any guaranteed liability under the scheme. There is no financial liability, hence they become redundant. But I will be turning, obviously, to the way they are placed. In 2022, the Minister entered into deeds of partial release with the credit institutions. It is important to reassure people watching, and the taxpayers of our country, and the depositors and whatever, or all of the people of our country, that the credit institutions are required to comply with the prudential reporting requirements set out under EU regulation. And it includes that EU regulation, implemented domestically, includes a template for mandatory reporting, so that still exists, with resultant transparency obligations, and they are all codified. And, indeed, I would agree with Senator Crowe that they go further, indeed, than the original regulation. This regulation has been implemented by government, and, of course, there is the supervision. So you have the EU regulation, you have the government's implementation thereof, you have the central bank regulation. And as part of the 2022 banking review, a pay restructuring was approved. And that allowed a variation of £20,000 in individual pay packets, and it did lift the ceiling on the senior executive pay. Now, that obviously engages a lot of discussion, but it is important to note that there is a greater demand for staff now in IT, there is the cyber security issue, there is risk management, legal and compliance. And the banks or the financial institutions, including, pertinently today, the credit unions, are competing with the private sector for a certain pool of people. And while the money to lay people looks extraordinary, in that world, that kind of money is the norm. And it is important also for people to know that, in real terms, the state has recovered £2 billion more from, say, the Bank of Ireland than taxpayers were paid in, or were liable for. So there has been a £2 billion win for the taxpayers of the country. So the money has been retrieved. So I suppose, in essence, the Credit Institution Financial Support Act and the Eligible Liabilities Guarantee Schemes, the inherent regulations there, are redundant now. They have been replaced by EU regulation, by current central bank regulation, and by government implementation of the EU regulation. So they are redundant and obsolete, and it is a duplication to have all the sets of parallel regulations. And I suppose, if you like, in layperson's terms, this exercise today is a tidying up, is an administrative overhaul, and is an acceptance of current and new realities. And it is worthy of final note that the financial guarantees were necessary at the time, and indeed, at the time, were supported by all the parties represented in this house, at the moment, and were necessary at the time for ordinary people. There would have been Armageddon without them. And now there is a new regulatory framework, indeed related to all of that, that supersedes anything that went with that. And for that reason, I, on behalf of Fine Gael, support the legislation. I hope it goes through, unanimously, through the House. And I think it's a worthy exercise. Thank you. It's gone through the doll already. Thank you. To have a beautiful look at, Handor. You can see porous art and extra anatomy.