Government banking plan made ‘on the hoof’

FINE GAEL accused the Government of making up its banking plan “on the hoof” after last-minute changes were made to legislation giving effect to the state takeover of Anglo Irish Bank.

Anglo will be nationalised late tonight or tomorrow following votes in the Dáil and Seanad, which have been called back from their Christmas holidays to debate the plans announced last Thursday.

During today’s debate, the Labour Party will call for a “comprehensive investigation” into how Anglo was operated, particularly how former chief executive Sean FitzPatrick hid loans of up to €122 million from shareholders.

The party wants a High Court-appointed inspector to investigate this and other issues at the bank.

The Government yesterday removed a provision from the draft Anglo Irish Bank Bill 2009 which prevented those with loans of more than €20m from taking out money they had deposited in the bank of a value above their debt.

Junior Minister Martin Mansergh said yesterday that it was removed following advice from the Attorney General. He said he was not aware whether or not legal representations were made on behalf of Anglo customers in relation to the provisions.

However, a spokesperson for the Taoiseach later corrected Mr Mansergh’s remarks, saying it was the officials drawing up the legislation in the Department of Finance who had decided to remove the provision.

Fine Gael finance spokesman, Richard Bruton said: “The Government seems to be making up its banking strategy as it goes along. The changes in rules on deposits have added to this impression.

“The growing confusion is now inflicting additional damage on all the banks. Investors are losing confidence in the Government’s recapitalisation plan,” he said.

Labour Party finance spokeswoman Joan Burton said it was unacceptable that the final bill was not ready yesterday evening ahead of the debate on the legislation in the Dáil this evening.

“It is totally unsatisfactory that less than 24 hours before the Dáil is due to meet, we still do not have a final and complete text of this crucial Bill,” she said.

“The delay in providing a final text does not inspire any confidence that the government is on top of the situation,” she added.

The Labour Party will propose an amendment to the bill which will require Finance Minister Brian Lenihan to consult the Dáil before appointing an assessor who will decide how much should be paid to shareholders when the State takes over the bank.

Ms Burton will also propose that both houses of the Oireachtas, and not just the minister, should appoint the board of Anglo “so that it is not composed of the usual political appointees”.

Fine Gael has written to the Taoiseach with a list of questions it needs answered ahead of today’s vote on the bill, including: Does the Government plan to keep the bank going in the long term and will a specialist management team be appointed to deal with distressed property related loans?