Second Stage of the Central Bank Reform Bill 2010

Yesterday in the Dáil, the Minister for Finance Brian Lenihan TD presented the Second Stage of the Central Bank Reform Bill:

The Following is the speech that he delivered:

A Cheann Comhairle, it is now three weeks since I outlined to this House the last major element of the Government’s strategy to resolve our banking crisis.

The decisive and bold steps we have taken are not popular; and the honest and full disclosure by the Government and its agencies of the appalling mess we have uncovered within our banks has shocked the nation. But I do believe that there is recognition among the citizens that the measures we have taken are necessary and that they are the correct measures to put our financial institutions back on a sound footing so that they can return to the business of serving the best interests of our economy.

I believe public confidence in the system of regulation we have put in place is growing by the day and I believe that the work of NAMA in cleaning up the banks’ balance sheets and forcing them and their borrowers to face up to their losses is winning the respect of the public. I want to acknowledge, in particular the contributions of the Governor of the Central Bank, Professor Patrick Honohan, the Financial Regulator, Matthew Elderfield, and the Chief executive of NAMA, Brendan McDonagh. Over the last three weeks, they have, in their respective roles brought enormous credibility and professionalism to the new structures this Government has put in place to resolve our banking crisis.

The decisions we have taken have also met with approval internationally. The IMF has said the measures we have put in place will preserve our financial stability and ensure our banks can withstand any future losses. The Commission Vice-President for Competition Joaquin Almunia has also endorsed our actions. Specifically he said: “There is no doubt that both Anglo Irish Bank and INBS need a significant recapitalisation to meet their obligations. The measures are also necessary to preserve financial stability in Ireland.”

There has been favourable commentary from respected newspapers such as the Financial Times and the Wall Street Journal as well as the Economist magazine and Newsweek.

The financial markets have reacted favourably. The Ratings Agency Moody’s described NAMA as an ingenius mechanism with several successful historical precedents.

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