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26 January 2010 - Closing Remarks (Mr Seán Haughey TD, Minister of State at the Department of Education and Science, to Seanad Éireann)

I thank Senators for their considered and useful contributions to this issue. I will attempt to respond to as many as possible of the points raised by Senators in the time available to me.

As Members know, last week the Minister for Finance announced the Government’s decision to set up two reviews and a statutory commission of inquiry to complete an expert, authoritative and structured examination of the financial crisis and its impact in Ireland to understand where the crisis in the banking system originated and assess whether lessons can be learned to inform our future management of the sector, both in regard to institutions and their management and direction and in regard to the management of risks and stability issues within the regulatory and Government systems.

Over the coming months, a significant amount of work needs to be completed to return our banking system to health. We need to complete the first stage of the critical transfer of assets to NAMA, we need to agree the banks’ restructuring plans and their future capital requirements and we need to progress the consolidation of the building society sector. I remind the House that the banking system is still fragile; we are not out of the woods yet. It is important that the work, as outlined by the Minister of State, is completed before we turn our attention to the formal inquiry we all agree must take place. That is why the Government proposes the multi-stage investigation. That investigation will be completed by the end of the year.

I wish to address the issue of holding the inquiry in public which was raised by Senators Alex White, Norris, Donohoe and others. Providing for a commission of investigation to conduct its business in private would allow for the restructuring of the banking sector and the recapitalisation of relevant institutions to proceed in advance of a public debate by the Oireachtas committee. Under the legislation, the commission would be able to conduct specific parts of its investigation, for example, into the affairs of individual institutions, in private. This will minimise the risk of interfering with the ongoing Garda and Office of the Director of Corporate Enforcement investigations. Later stages of the commission’s work dealing with the other institutions and the broader system could, subject to the agreement of the parties involved, take place in public.

The Oireachtas will be involved at each stage of the planned inquiry process. An appropriate Oireachtas committee, the Oireachtas Committee on Finance and the Public Service, which would seem to be the most relevant, will meet the governor and the independent expert at the outset of their work to be briefed on the members’ priorities for investigation. The two preliminary reports, when completed, will be laid before the Houses of the Oireachtas and the Oireachtas committee will be invited to consider the findings of the reports.

The terms of reference and draft Government order to establish the statutory commission of investigation will be laid before the Houses of the Oireachtas and the report of the commission of investigation will, when completed, be laid before the Oireachtas for further consideration by the committee. It is open to the committee to hold public hearings on the report.

There has been some reference to the DIRT inquiry as a possible model for the inquiry into the financial crisis but investigative work in that inquiry was done by the Comptroller and Auditor General. An Oireachtas committee cannot be a court of judgment on private individuals and cannot find on disputed issues of fact. That is why the Government has decided to adopt the commission of inquiry mechanism and why it has chosen a framework for investigation that is most effective and efficient.

For an investigation to proceed speedily and cost effectively, it must be able to conduct its business in private. The only other alternative that allows us to investigate a matter conclusively is a tribunal of inquiry. The Dáil and, I believe, a majority in this House are unanimous in the view that a tribunal is too expensive and too protracted. That was why the Oireachtas enacted the Commissions of Investigation Act 2004.

The establishment of the two reviews and the proposed statutory commission of investigation will provide the Government and the Oireachtas with the necessary information to identify the lessons to be learned from the crisis and to put in place the necessary systems and structures to manage more effectively banking and the financial services sector. It will also enable banks to resume their essential role in the economy, the extension of credit to business with opportunities to invest. This, together with the initiatives the Government is pursuing to restore competitiveness and put the public finances in order, will result in Ireland being well placed to take advantage of the economic recovery beginning to take hold around the world.

Again, I thank Senators for their constructive contributions.

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