THE TWO big banks, AIB and Bank of Ireland, could be broken up by a Fine Gael government, the party’s deputy leader and finance spokesman, Richard Bruton, warned.
“The banking sector must accept significant responsibility for the economic collapse that Ireland has experienced,” he told the Irish Banking Federation’s national conference in Dublin. He said the property bubble had been pumped up by banks seeking short-term profits without regard for the risks and that had made Ireland the most exposed country in Europe to a credit crisis.
“Ordinary people are furious because they see the taxpayer being made the patsy who has to pay for the damage done. Shareholders in the banks certainly suffered but the big earners who managed the reckless expansion have been able to go off into the sunset with their huge bonuses untouched and their golden handshakes to top it off.”
Mr Bruton said an unprepared and complicit Government had been bounced by dire warnings from the banking sector to accept vastly expensive solutions which had saved the investors in the banks at the expense of the taxpayer. “It was panicked and threatened into this by the very people who failed to act to stop it, threatened that the entire country would be cut off from international lending markets unless the banks and many of their professional investors were saved,” he said.
Mr Bruton said that if the current Government did not address the situation the next Fine Gael government would. He said reforms that could not be ruled out included, breaking up the biggest domestic banks so that they were no longer considered too big to be allowed fail; the introduction of clear banking offences with massive penalties; making reckless lending unenforceable in the courts and measures to ensure that the taxpayer will in future only underwrite the good elements of banking.
Meanwhile, during the debate on the committee stage of the Nama (National Asset Management Agency)Bill which continued late last night in the Dáil, Minister for Finance Brian Lenihan gave a pledge that he would introduce an amendment at the report stage of the Bill to issue guidelines on the flow of credit from banks. He was responding to requests from Fine Gael that he deal with the problem of credit flow to businesses. His announcement was welcomed by Opposition TDs.
Meanwhile, Green Party chairman Senator Dan Boyle has criticised the draft business plan for Nama. “For a start, I don’t have great faith in the business plan. I think it’s implausibly optimistic,” Mr Boyle said.
“But even at that an implausibly optimistic business plan talks about a profit of 1 per cent per year over a 10-year period. That’s the type of rip-off you’re talking about, a 1 per cent profit,” said Mr Boyle.