Brian's Big Bank Bailout Bill

http://www.oireachtas.ie/viewdoc.asp?DocID=10023

I'm posting this link to the Bill, proposed amendments and explanatory memorandum in an easy-to-find-place. Apologies if its already here somewhere else.

AN BILLE UM FHORAIS CHREIDMHEASA (TACAÍOCHT
AIRGEADAIS) 2008
CREDIT INSTITUTIONS (FINANCIAL SUPPORT) BILL 2008
Mar a tionscnaíodh
As initiated
ARRANGEMENT OF SECTIONS
Section
1. Interpretation.
2. Functions performed in the public interest.
3. Relevant date.
4. Expenses of Minister.
5. Regulations—general implementation of this Act.
6. Provision of financial support for credit institutions.
7. Modification of application, etc., of certain provisions of
Competition Act 2002.
8. Consequential amendments of other Acts.
9. Short title.
[No. 45 of 2008]
ACTS REFERRED TO
Central Bank Act 1942 1942, No. 22
Central Bank Act 1997 1997, No. 8
Central Bank and Financial Services Authority of Ireland Act 2003 2003, No. 12
Companies Act 1963 1963, No. 33
Companies Acts
Competition Act 2002 2002, No. 14
Finance Act 1970 1970, No. 14
National Pensions Reserve Fund Act 2000 2000, No. 33
National Treasury Management Agency Act 1990 1990, No. 18
AN BILLE UM FHORAIS CHREIDMHEASA (TACAÍOCHT
AIRGEADAIS) 2008
CREDIT INSTITUTIONS (FINANCIAL SUPPORT) BILL 2008
BILL
entitled
AN ACT TO PROVIDE, IN THE PUBLIC INTEREST, FOR
MAINTAINING THE STABILITY OF THE FINANCIAL
SYSTEM IN THE STATE AND FOR THAT PURPOSE TO
PROVIDE FOR FINANCIAL SUPPORT BY THE MINISTER
FOR FINANCE IN RESPECT OF CERTAIN CREDIT
INSTITUTIONS, TO AMEND THE COMPETITION ACT 2002
AND OTHER ENACTMENTS, AND TO PROVIDE FOR
CONNECTED MATTERS.
BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:
1.—In this Act—
“Central Bank” means the Central Bank and Financial Services
Authority of Ireland;
“credit institution” has the meaning it has in the Central Bank Act
1997;
“financial support” includes a loan, a guarantee, an exchange of
assets and any other kind of financial accommodation or support;
“Governor” has the meaning it has in section 2 (inserted by section 3
of the Central Bank and Financial Services Authority of Ireland Act
2003) of the Central Bank Act 1942;
“Minister” means Minister for Finance;
“Regulatory Authority” has the meaning it has in section 2 (inserted
by section 3 of the Central Bank and Financial Services Authority of
Ireland Act 2003) of the Central Bank Act 1942;
“subsidiary”, in relation to a credit institution, has the meaning it has
in section 155 of the Companies Act 1963.
2.—(1) The Minister has, in the public interest, the functions
provided for under this Act because, after consulting the Governor
and the Regulatory Authority, the Minister is of the opinion that—
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Interpretation.
Functions
performed in the
public interest.
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(a) there is a serious threat to the stability of credit institutions
in the State generally, or would be such a threat if those
functions were not performed,
(b) the performance of those functions is necessary, in the
public interest, for maintaining the stability of the financial
system in the State, and
(c) the performance of those functions is necessary to remedy a
serious disturbance in the economy of the State.
(2) The Minister may continue to consult with the Governor and the
Regulatory Authority in the continuing performance of the Minister’s
functions under this Act.
(3) Nothing in this Act prevents the performance by the Central
Bank or the Regulatory Authority of its functions in relation to any
credit institution.
3.—In this Act “relevant date” means 30 September 2008.
4.—To the extent that the Minister incurs any expenditure not met
in accordance with section 6, the expenditure shall be paid out of the
Central Fund or the growing produce thereof.
5.—(1) The Minister may, in respect of any difficulty that arises in
the operation of this Act during the period of 2 years beginning on the
relevant date, make regulations to do anything that appears necessary
or expedient for bringing this Act into operation.
(2) Regulations made under this section may contain such
incidental, supplementary and consequential provisions as appear to
the Minister to be necessary or expedient for the purposes of the
regulations.
(3) Where the Minister proposes to make regulations under this
section—
(a) he or she shall, before doing so, consult with any other
Minister of the Government that the Minister considers
appropriate having regard to the functions of that other
Minister of the Government in relation to the proposed
regulations,
(b) he or she shall cause a draft of the proposed regulations to
be laid before each House of the Oireachtas, and
(c) he or she shall not make the regulations unless and until a
resolution approving of the draft has been passed by each
such House.
2
Relevant date.
Expenses of
Minister.
Regulations—
general
implementation of
this Act.
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6.—(1) As and from the relevant date, the Minister may provide
financial support in respect of the borrowings, liabilities and
obligations of any credit institution or subsidiary which the Minister
may specify by order having regard to the matters set out in section 2,
the extent and nature of the obligations (including the degree of
control over possible abuse of the financial support) undertaken and
which might be undertaken in the future and the resources available
to him or her in that behalf.
(2) In subsection (1) a reference to borrowings, liabilities and
obligations includes borrowings, liabilities and obligations to the
Central Bank or any person.
(3) Financial support shall not be provided under this section for
any period beyond 29 September 2010, and any financial support
provided under this section shall not continue beyond that date.
(4) Financial support may be provided under this section in a form
and manner determined by the Minister and on such commercial or
other terms and conditions as the Minister thinks fit. Such provision
of financial support may be effected by individual agreement, a
scheme made by the Minister or otherwise. Without prejudice to the
Minister’s discretion as to such conditions, all financial support
provided shall so far as possible ultimately be recouped from the
credit institution or subsidiary to which the support was provided.
(5) A scheme under subsection (4) shall be laid before each House
of the Oireachtas as soon as may be after it is made and, if a
resolution annulling the scheme is passed by either such House within
the next 21 days on which that House has sat after the scheme is laid
before it, the scheme shall be annulled accordingly but without
prejudice to the validity of anything previously done under the
scheme.
(6) Without prejudice to subsection (4), the conditions under which
the Minister provides financial support under this section may include
conditions regulating the commercial conduct of the credit institution
or subsidiary to which the support is provided, and in particular may
include conditions to regulate the competitive behaviour of that credit
institution or subsidiary.
(7) The Minister may, as a condition of providing financial support
to a credit institution or subsidiary under this section, require the
credit institution or subsidiary to fulfil the requirements for the time
being imposed by the Central Bank or equivalent authority (including
those in relation to the conduct of its business and its competitive
behaviour) and to continue to do so.
( A condition referred to in this section—
(a) may, where financial support is provided to a credit
institution under this section, regulate the commercial
conduct of a subsidiary (whether or not financial support is
being provided to the subsidiary), and
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Provision of
financial support for
credit institutions.
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(b) may, where financial support is provided under this section
to a subsidiary of a credit institution, regulate the
commercial conduct of the credit institution or another
subsidiary (whether or not financial support is being
provided to the credit institution).
(9) The Minister may subscribe for, take an allotment of or
purchase shares and any other securities in a credit institution or
subsidiary to which financial support is provided under this section
on such terms as the Minister sees fit.
(10) The Minister may withdraw or revoke financial support
provided to a credit institution or a subsidiary under this section in
accordance with the terms or conditions of the financial support as the
Minister thinks fit.
(11) For the purposes of this section, the Minister may, whenever
and so often as he or she thinks fit, create and issue securities—
(a) bearing interest at such rate as he or she thinks fit, or no
interest,
(b) for such cash or non-cash deferred consideration as he or
she thinks fit, and
(c) subject to such terms and conditions as to repayment,
repurchase, cancellation and redemption or any other
matter as he or she thinks fit.
(12) All money to be paid out or non-cash assets to be given by the
Minister under this section may be paid out of the Central Fund or the
growing produce thereof.
(13) Money paid by a credit institution or subsidiary to the Minister,
or any non-cash consideration received by the Minister from such
credit institution or subsidiary, is to be paid into, or disposed of for
the benefit of, the Exchequer in connection with the performance of
his or her functions under this section or for any other purpose in
such manner as the Minister thinks fit.
(14) Where financial support has been provided under this section
to a credit institution or subsidiary, the Minister—
(a) shall from time to time review the necessity for the financial
support, and
(b) if he or she is satisfied, having regard to the considerations
set out in section 2, that the financial support is no longer
necessary, shall withdraw the financial support.
(15) As soon as practicable after the end of 2009 and each year
thereafter, the Minister shall lay a report before each House of the
Oireachtas for the purpose of informing the members of each House
on the situation with regard to any financial support provided under
this section. The report shall give particulars of—
(a) the aggregate amount of payment and the amount (if any)
repaid to the Minister on foot of the payment, and
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(b) the aggregate amount of money that was outstanding at the
end of that year on foot of such financial support.
(16) The publication of the reports required by subsection (15) shall
be taken as satisfying any obligation of the Minister under Regulation
3 of the European Communities (Financial Transparency)
Regulations 2004 (S. I. No. 693 of 2004).
(17) A reference in section 99(2) of the Companies Act 1963 to a
charge shall be taken not to include any charge created by a credit
institution or subsidiary in favour of the Minister or any agent of the
Minister (including the National Treasury Management Agency) or
the Central Bank. Section 99 of that Act shall not apply to any such
charge.
(18) Notwithstanding any provision in the memorandum or articles
of association of a credit institution or subsidiary that provides for the
keeping of a register of charges created by that credit institution or
subsidiary, a charge of a kind referred to in subsection (17) shall not
be entered in that register.
(19) In subsection (18) “articles of association” shall, in the case of
a body corporate that is not a company within the meaning of the
Companies Acts, be taken to include any other instrument
constituting or defining its constitution, including bye-laws.
7.—(1) This section applies to a merger or acquisition (within the
meaning of section 16 of the Act of 2002) that involves a credit
institution or subsidiary where the Minister—
(a) after such consultation with the Central Bank and the
Regulatory Authority as the Minister considers necessary,
is of the opinion that—
(i) the proposed merger or acquisition is necessary to
maintain the stability of the financial system in the
State, and
(ii) there would be a serious threat to the stability of that
system if the merger or acquisition did not proceed, and
(b) certifies in writing to the parties to the merger or
acquisition, the Competition Authority and the Governor
that he or she is of that opinion.
(2) Notwithstanding anything in the Act of 2002, a notification of a
merger or acquisition to which this section applies shall be given to
the Minister and not to the Competition Authority.
(3) A determination, that a merger or acquisition to which this
section applies may be put into effect, is referred to in this section as
an approval.
(4) A merger or acquisition to which this section applies and which
has been notified to the Minister shall not be put into effect unless
and until the Minister has made a determination in relation to the
merger or acquisition under this section.
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Modification of
application, etc., of
certain provisions of
Competition Act
2002.
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(5) Where the Minister is of the opinion that in order to consider a
merger or acquisition to which this section applies he or she requires
further information, he or she may by notice require any one or more
of the undertakings concerned to supply, within a specified period,
specified information. An undertaking shall comply with such a
direction.
(6) On receipt of a notification under subsection (2), the Minister—
(a) shall consult urgently with the Minister for Enterprise,
Trade and Employment, the Governor, the Central Bank
and the Competition Authority,
(b) shall publish the notification in any way the Minister thinks
fit, and
(c) shall invite the making, in accordance with procedures
provided for in the regulations, of submissions on the
notification.
(7) The Governor and the Competition Authority shall provide any
advice, information and assistance that the Minister reasonably
requires for the purposes of making a decision on a notification under
subsection (2).
( The Minister may appoint a suitably qualified person as a
competition advisor for the purposes of assisting with the
consideration of a notification under subsection (2).
(9) Any person affected by a proposed merger or acquisition to
which this section applies may make a submission to the Minister in
relation to the proposed merger or acquisition.
(10) The Minister shall make a decision whether to approve a
merger or acquisition to which this section applies as soon as
reasonably practicable after he or she receives the notification under
subsection (2) for its approval.
(11) The Minister shall approve a merger or acquisition to which
this section applies if, in the Minister’s opinion, the result of the
merger or acquisition will not be to substantially lessen competition
in markets for goods or services in the State and, accordingly, that the
merger or acquisition may be put into effect.
(12) The Minister may approve a merger or acquisition to which
this section applies even if he or she forms the opinion that the result
of the merger or acquisition will be to substantially lessen
competition in markets for goods or services in the State but that the
merger or acquisition is necessary having regard to any or all of the
following:
(a) maintenance of the stability of the financial system in the
State;
(b) the need to avoid a serious threat to the stability of credit
institutions;
(c) the need to remedy a serious disturbance in the economy of
the State.
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(13) The Minister, after considering a notification under subsection
(2), may—
(a) approve the merger or acquisition with or without
conditions, or
(b) refuse to approve the merger or acquisition.
(14) In determining any conditions to be imposed in relation to a
merger or acquisition, the Minister shall have regard to the effect of
the merger or acquisition in the market for goods or services in the
State, the maintenance of the stability of the financial system in the
State, the need to avoid any serious stress in the stability of credit
institutions and the need to remedy a serious disturbance in the
economy of the State. In particular the Minister may impose such
conditions as he considers appropriate to facilitate competition in the
markets for those goods and services having regard to the aforesaid
matters.

(15) Sections 4( and 5(3) of the Act of 2002 shall apply to a
merger or acquisition to which this section applies and, accordingly,
for that purpose references in those provisions to Part 3 of the Act of
2002 shall be read as references to this section.
(16) Part 3 of the Act of 2002 applies in relation to a merger or
acquisition to which this section applies with—
(a) the modifications specified in subsection (17),
(b) any other necessary modifications, and
(c) any adaptations of that Part’s provisions made by
regulations under section 5.
(17) The modifications mentioned in subsection (16)(a) are—
(a) references to the Competition Authority in sections 16, 18,
20 and 26 shall be read as references to the Minister;
(b) sections 17, 19, 21, 22, 23, 24, 25 and 27 shall be
disregarded;
(c) so much of section 20 provision for the matters contained in
which are made by this section shall be disregarded;
(d) the following definition shall be substituted for the
definition of “determination” in section 26:
“ ‘determination’ means an approval of the Minister for
Finance under section 7 of the Credit Institutions
( Financial Support ) Act 2008;”.
(18) References in the Act of 2002 to Council Regulation (EEC)
No. 4064/89 on the control of concentrations between undertakings
should be read as references to Council Regulation (EC) No.
139/2004 on the control of concentrations between undertakings.
(19) The Minister may make regulations to determine the
procedures to be followed in making submissions under this section,
including, without limit to the generality of the foregoing—
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(a) the form and type of submissions to be made to the
Minister,
(b) the appointment of representatives of persons having
substantially the same interests,
(c) the means by which confidential information is to be
protected from public disclosure.
(20) In this section “Act of 2002” means the Competition Act 2002.
8.—(1) The First Schedule to the National Treasury Management
Agency Act 1990 is amended by—
(a) the deletion of “and” before paragraph (m); and
(b) the addition after paragraph (r) of:
“and
(s) subsections (1) to (11) of section 6 of the Credit
Institutions (Financial Support) Act 2008”.
(2) Section 54 of the Finance Act 1970 is amended by inserting
after subsection (7B) (inserted by the National Development Finance
Agency Act 2002):
“(7C) The Minister for Finance may engage in such
transactions of a normal banking nature with any person—
(a) in connection with the performance of his or her
functions under section 6 of the Credit Institutions
(Financial Support) Act 2008, and
(b) for the purpose of the better management of any
indebtedness incurred by the Minister under that
section,
and may for the purpose of those transactions issue such funds
from the Exchequer as the Minister for Finance considers
appropriate. The expenses and other costs incurred by the
Minister for Finance in connection with or arising out of those
transactions shall be charged on the Central Fund or the
growing produce thereof.”.
(3) The First Schedule to the National Treasury Management
Agency Act 1990 is amended by inserting the following after
paragraph (gggg) (inserted by the National Development Finance
Agency Act 2002):
“(ggggg) section 54(7C) (inserted by the Credit
Institutions (Financial Support) Act 2008) in so far
as that section relates to the engagement in certain
transactions of a normal banking nature) of the
Finance Act 1970.”.
(4) Section 138 of the Finance Act 1993 is amended by inserting,
after subparagraph (iv) of subsection (1)(b):
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Consequential
amendments of
other Acts.
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“(v) any securities or financial instrument determined
by the Minister as permissible on such terms and
conditions as the Minister may determine.”.
9.—This Act may be cited as the Credit Institutions (Financial
Support) Act 2008.
9
Short title.
5


Apologies for loss of formatting, but no apologies for the sponaneous eruption of emoticons.

DÁIL ÉIREANN
AN BILLE UM FHORAIS CHREIDMHEASA (TACAÍOCHT
AIRGEADAIS) 2008
—AN COISTE
CREDIT INSTITUTIONS (FINANCIAL SUPPORT) BILL 2008
—COMMITTEE
Leasuithe
Amendments
SECTION 1
1. In page 1, before section 1, to insert the following new section:
1.—This Act (other than section 7) shall not come into operation until the
Minister has published and laid before each House of the Oireachtas for its approval
full particulars of the terms and conditions under section 6(4) including the terms
and conditions of any scheme.”.
—Joan Burton.
SECTION 2
2. In page 1, before section 2, to insert the following new section:
2.—It shall be a condition of an application under this Act for financial support
that an applicant shall agree not to offer to any of its officers or employees any
share options during the currency of financial support and to limit the gross annual
earnings of any of its officers or employees to not more than the gross earnings of
the Minister for Finance during that period.”.
—Joan Burton.
3.
In page 1, before section 2, to insert the following new section:
1.A committee of the National Treasury Management Agency consisting of the
chairperson and chief executive of the Agency shall be established to review the
remuneration of board members and senior officers and employees of institutions
participating in a scheme or arrangement under this Act and shall report annually to
the Joint Oireachtas Committee on Finance and Public Service.
—Joan Burton.
4.
In page 1, before section 2, to insert the following new section:
2.(1) During the currency of any financial support provided under this Act to a
credit institution the Minister shall ensure that such credit institution takes all
necessary steps to restructure their loan books to deal with any loans that are in
difficulties in consultation with the Regulating Authority.
[No. 45 of 2008] [01 October, 2008]
“Commencement.
“Conditions of any
application for
financial support.
Remuneration
review.
[ SECTION 2 ]
(2) During currency of any financial support provided under this Act to a credit
institution the Minister shall restrict as appropriate the payment of dividends,
bonuses or other monies that may limit the rebuilding of the capital of the credit
institution.
—Richard Bruton.
5.
In page 2, before section 3, to insert the following new section:
3.The Minster shall at all times in the operation of this Act be cognisant of the
broader competitive environment along with the business needs of all banks with
substantial operations in Ireland.
—Richard Bruton.
SECTION 5
6.
In page 2, subsection (3)(a), lines 29 and 30, to delete “ any other Minister of
the Government” and substitute the following:
“the Joint Oireachtas Committee on Finance and the Public Service and
any other person or body”.
—Joan Burton.
7.
In page 2, subsection (3)(a), line 32, to delete “Minister of the Government” and
substitute the following:
“person or body”.
—Joan Burton.
8.
In page 2, subsection (3)(c), to delete all words from “has” in line 37 down to
and including “House” in line 38 and substitute the following:
“has been debated and passed by each such House”.
—Arthur Morgan.
Section opposed
—Richard Bruton.
SECTION 6
9.
In page 3, before section 6, to insert the following new section:
2
[ SECTION 6 ]
6.An annual charge to be known as the State credit institution guarantee charge
shall be levied annually on all institutions participating in a scheme or arrangement
under this Act for the purpose of making good the costs (including the costs
associated with accepting risk) incurred by the State in connection with the scheme
or arrangement.
—Joan Burton.
10.
In page 3, subsection 1, line 3, after “obligations” to insert “excluding equity
shareholdings”.
—Richard Bruton.
11.
In page 3, subsection (1), line 3, after “institution” to insert the following:
“headquartered in this state or subsidiary thereof”.
—Arthur Morgan
12.
In page 3, between lines 8 and 9, to insert the following subsection:
“(2) There shall be an oversight board consisting of 3 persons appointed by the
Public Accounts Committee of Dail Eireann being persons of international financial
expertise and repute, which shall report every 6 months to that Committee on the
operation of this Act.”.
—Joan Burton, Richard Bruton.
13.
In page 3, between lines 8 and 9, to insert the following subsection:
“(2) Without prejudice to subsection (1), the obligations of a credit institution in
receipt of financial support shall include an obligation to take all measures to avoid
abuse of the financial support in accordance with a detailed scheme in that regard to
be drawn up by the Minister with the approval of both Houses of the Oireachtas
which shall provide for effective oversight mechanisms of any such institution.”.
—Joan Burton.
14.
In page 3, subsection (4), lines 16 and 17, to delete “or other”.
—Joan Burton, Richard Bruton.
15.
In page 3, subsection (4), line 17, after “fit” to insert the following:
“within the confines of the Irish national interest”.
—Arthur Morgan.
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Charge.
[ SECTION 6 ]
16.
In page 3, subsection (4), lines 19 and 20, to delete all words from and including
“Without” in line 19 down to and including “, all” in line 20 and substitute
“All”.
—Joan Burton, Richard Bruton.
17.
In page 3, subsection (4), line 21, to delete “so far as possible”.
—Richard Bruton.
18.
In page 3, between lines 22 and 23, to insert the following subsection:
“(5) The Minister shall, on the passage of this Act, introduce a credit institution
levy for the purpose of reducing the liability of the Government in respect of its
financial guarantee.”.
—Arthur Morgan.
19.
In page 3, subsection (4), between lines 22 and 23 to insert the following
paragraph:
“(a) The State, through a scheme, shall recoup its investment at the earliest
possible time, together with a consideration commensurate with the level
of risk carried by the Exchequer in each case.”
—Arthur Morgan.
20.
In page 3, lines 23 to 29, to delete subsection (5) and substitute:
“(5) A scheme under subsection (4) shall be laid in draft before each House of the
Oireachtas and shall not be made unless resolutions approving the draft are passed
by each such House.”.
—Joan Burton.
21.
In page 3, subsection (5), line 23 after “A scheme” to insert “individual
agreement or any other measure”.
—Richard Bruton.
22.
In page 3, subsection (5), line 24, to delete “as soon as may be after it is made”
and insert “within three days for adoption by each such House”.
—Richard Bruton.
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[ SECTION 6 ]
23.
In page 3, subsection (5), line 29, to insert the following new paragraph:
(b) Such scheme, individual agreement or other measure made under
subsection (4) shall set out the arrangements that have been made to
satisfy the requirements of subsections (4) and (6) of this section.
—Richard Bruton.
24.
In page 3, between lines 29 and 30 to insert the following new subsection:
“(6) It shall be a condition of an application under this section that an applicant
shall agree that in the event of financial support under this Act being availed of
from State resources, the applicant (if a limited company) shall issue shares to the
Minister for Finance to a value equivalent to the amount paid by the State under the
financial support.”.
—Joan Burton.
25.
In page 3, between lines 29 and 30 to insert the following new subsection:
“(6) No guarantee under this section shall apply to any business acquired by an
applicant after the date of passing of this Act unless the Minister for Finance so
directs, or to any liability of a bank acquired on the basis of an interest rate that
differed more than one per cent from the associated banks lending rate.”.
—Joan Burton.
26.
In page 3, between lines 35 and 36, to insert the following new subsection:
“(7) (a) Any credit institution in receipt of financial support under this Act shall
have appointed to its risk assessment committee, risk management committee or
other appropriate board, such person as the Minister directs to protect against
possible misuse of such financial support .
(b) Any credit institution inreceipt of financial support under this Act shall have
appointed to is Board of management such person as the Minsiter directs to
protect against possible misuse of such financial support.
(c) Any person appointed under paragragh (a) and (b) shall be of an appropriate
degree of qualification and experience to discharge their function under
paragraph (a).”.
—Richard Bruton.
27.
In page 3, subsection (7), line 36, to delete “may” and substitute “shall”.
—Joan Burton.
5
[ SECTION 6 ]
28.
In page 4, subsection (15), line 39 to delete “2009 and each year” and substitute
“October 2008 and each month”.
—Joan Burton.
6

[First additional list of amendments.]
DÁIL ÉIREANN
AN BILLE UM FHORAIS CHREIDMHEASA (TACAÍOCHT
AIRGEADAIS) 2008
—AN COISTE
CREDIT INSTITUTIONS (FINANCIAL SUPPORT) BILL 2008
—COMMITTEE
Leasú Breise
Additional Amendment
SECTION 6
19a. In page 3, between lines 22 and 23, to insert the following new subsection:
(5) In making a scheme under subsection (4) the Minister may require any
specified credit institution to make particular provision to meet the credit
requirements of persons on low incomes, and he shall consult with the Money
Advice and Budgeting Service in this regard.
—Joan Burton.
[No.

[Second additional list of amendments.]
DÁIL ÉIREANN
AN BILLE UM FHORAIS CHREIDMHEASA (TACAÍOCHT
AIRGEADAIS) 2008
—AN COISTE
CREDIT INSTITUTIONS (FINANCIAL SUPPORT) BILL 2008
—COMMITTEE
Leasú Breise
Additional Amendment
SECTION 6
9a. In page 3, line 1, to insert the following new subsection:
“(1) As part of this guarantee, a requirement is placed on the credit institutions, as
defined, to negotiate with mortgage holders on low incomes, and at risk of losing
their homes, a plan for the reasonable repayment of their mortgage, using whatever
means necessary, including the aid of the State agencies.”.
—Arthur Morgan.
[No.[No. 45 of 2008] [1 October, 2008]

Amendments 2 to 4 negatised, the rest passed in Committee stage ? - there will be a vote on the amendments now.

Cactus Flower

Thanks I will need a strong cup of coffee.

The problem with such Bills is what they look like on superficial glance and what they can be made to mean can often be at variance.

With this spirit of National interest and saving our Banks from the devilish UK Hedge Funds high on the agenda, this may not be the right tone. If I had an involvement in any of the said organisations covered I would be looking to maximise benifit and returns, and rather than reading it from a parliamentary perspective we would really need to examine it from the other end, as it were. There in will probably lie the greatest weakness. Can it be abused and by so doing can the risk to us increase?

Seven page list of proposed Committee Stage amendments:

http://oireachtas.ie/documents/bills28/bills/2008/4508/b4508d-scn.pdf


[First additional list of amendments.]
SEANAD ÉIREANN
AN BILLE UM FHORAIS CHREIDMHEASA (TACAÍOCHT
AIRGEADAIS) 2008
—AN COISTE
CREDIT INSTITUTIONS (FINANCIAL SUPPORT) 2008
—COMMITTEE
Leasú Breise
Additional Amendment
SECTION 4
6a. In page 2, between lines 18 and 19, to insert the following new subsection:
“(2) Any loan or other monies provided directly to a credit institution under this Act, shall not exceed €10 billion.”.”
—Senator Liam Twomey.
[No. 45 of 2008] [2 October, 2008]

List of Amendments made by the Seanad

DÁIL ÉIREANN
AN BILLE UM FHORAIS CHREIDMHEASA (TACAÍOCHT
AIRGEADAIS) 2008
CREDIT INSTITUTIONS (FINANCIAL SUPPORT) BILL 2008
LEASUITHE A RINNE AN SEANAD
AMENDMENTS MADE BY THE SEANAD
SECTION 6
1. In page 3, lines 23 to 29, to delete subsection (5) and substitute the following:
“(5) Where the Minister proposes to make a scheme under subsection (4)—
(a) he or she shall cause a draft of the proposed scheme to be laid before each
House of the Oireachtas, and
(b) he or she shall not make the scheme unless and until a resolution
approving of the draft has been passed by each such House.”.
2. In page 5, line 8, subsection (17), after “charge” where it secondly occurs, to
insert “ to secure a liability or obligation arising under this section”.
[No. 45 of 2008] [2 October, 2008]

Never a hedge fund put a bank out of business in this world by buying or selling shares. If a bank is solvent and making a profit, it doesn't matter if its share price goes to €.01. It is still a profitable business and no one can force it out of business due to the price of its shares.

I think the bill's greatest impact won't be on Irish banks or the economy. We have aggravated some very important people in Europe and frankly pissed off the UK. Given our poaching of UK companies due to the corporate tax rate and this ill conceived piece of over-the-top legislation we have drawn a very bright spot light on how we do business and how we might be preceived as taking advantage of our position in the Euro. We haven't exactly come across as team players recently. Hi ho.

rockyracoon wrote:

Never a hedge fund put a bank out of business in this world by buying or selling shares. If a bank is solvent and making a profit, it doesn't matter if its share price goes to €.01. It is still a profitable business and no one can force it out of business due to the price of its shares.

I think the bill's greatest impact won't be on Irish banks or the economy. We have aggravated some very important people in Europe and frankly pissed off the UK. Given our poaching of UK companies due to the corporate tax rate and this ill conceived piece of over-the-top legislation we have drawn a very bright spot light on how we do business and how we might be preceived as taking advantage of our position in the Euro. We haven't exactly come across as team players recently. Hi ho.

It matters very much if a banks share price goes to 0.01 or anything like it, when that happens John, Joe, Mary & Mr. Boss go down and take all their money out for fear of a collapse and then there is a collapse.

Tonys is correct, the perception of liquidity is one of the most important things in the banks, as it is in any sector. The vast majority of what everyone does in business is based on perception rather than reality. Everyone doesn't have access to everyone else's books of accounts until they file them in the CRO a year in arrears so they have to base it on perception.

If a share price suddenly and drastically collapses it does two things. It panics comsumers who begin to withdraw their deposits. Any bank that is solvent has more assets than it does liabilities. However, no bank has the total value of its depositers in hard cash sitting in a vault. Consequence is they can't pay up. At the same time as the aforementioned, lending institutions from whom the bank borrows see the crisis in the share price which they presume is sparked by something, see the withdrawl of deposits and take the wise decision not to lend money in the sure knowledge that if they do they are unlikely to get it back.

And there goes the tale of how a perfectly solvent bank can become insolvent very very quickly.

Everything in this world is based on reputation, whether it is business or personal. Do you think people who go through a rape trial and come out the other side as shown innocent ever get treated the same way by many people who are around them? I highly doubt it. Same in business.

rockyracoon wrote:

Never a hedge fund put a bank out of business in this world by buying or selling shares. If a bank is solvent and making a profit, it doesn't matter if its share price goes to €.01. It is still a profitable business and no one can force it out of business due to the price of its shares.

I think the bill's greatest impact won't be on Irish banks or the economy. We have aggravated some very important people in Europe and frankly pissed off the UK. Given our poaching of UK companies due to the corporate tax rate and this ill conceived piece of over-the-top legislation we have drawn a very bright spot light on how we do business and how we might be preceived as taking advantage of our position in the Euro. We haven't exactly come across as team players recently. Hi ho.

If what we had done made sense then I would say let them complain, but it was an act of desperation. It is likely that they know it may not stand up in terms of EU law, but were just buying a bit of time. I hear that Lenihan said in the debate that he had contacted the ECB and been told he was on his own. I will look back over the transcript and see if I can find that.
The question of whether the ECB and EU would allow the Irish banks to be saved remains to be answered. Why would they not let them go down and an outside bank or two pick up the pieces. There is no way there would be a buyer at the moment, as going concerns.

The problem with acting as a tax haven or other conduit for money from other countries is that from their point of view unless the hole is plugged, serious amounts of finance can leak away.

We've almost entirely done this damage ourselves, through overspending and underinvestment in productivity. We are the most personally indebted people in Europe. We're going to have to dig in and deal with it. It should be an end to choosing politicians who only tell us what we want to hear.

I presume we are all aware that it takes about 6 months for the Commission to investigate anything and their decisions can be appealed to the European Court of Justice. It currently takes about 18 months to get a hearing at the ECJ so by the time Europe can do anything this guarantee will have expired. I would assume that it was partly on this basis that they made the decision.

As I have said here before, there are also countless manners in which you can derogate from virtually all provisions of Community law. On the grounds of national security and such like. I'm sure they'll be able to make a pretty good argument on that basis in 2 years time if the thing ever comes to a hearing.

As I have said, more likely is a device put in place by the ECB which makes our guarantee redundant anyway.

cactus flower wrote:

It should be an end to choosing politicians who only tell us what we want to hear.

What politician has ever won an election by telling the people anything other than what they want to hear?

tonys wrote:

It matters very much if a banks share price goes to 0.01 or anything like it, when that happens John, Joe, Mary & Mr. Boss go down and take all their money out for fear of a collapse and then there is a collapse.

True but the share price of a profitable bank won't go to €. 01 and no hedge fund can drive the price down withouth the fundamentals of any business dictating that the price can be driven down to €01. People are blaming the market and those who are involved in the market. This is just plain scape-goatism. The market prices assets, and that's all it does.

There are soveriegn funds and some other types of funds who are predatory in nature. They take over an underperforming company and rip it to shreads by selling off good assets at market value, recapitalizing through share issuance and selling a shell company to the unsuspecting punters. (Imo, this should be outlawed).

On the other hand, market participants shouldn't shoulder the blame for doing their jobs. These funds merely buy and sell shares. They do their analysis on what they think the company is worth and essentially place a bet that their analysis is correct by buying or selling shares. If you think this type of activity shouldn't take place, that's a different matter.

There are three big points about this legislation. Yes, it may have temporarily bouyed confidence in the Irish Banks, but it is not the confidence that Irish banks run a good business. It is the confidence that the Irish tax payer will pick up the pieces if something should go wrong. Secondly, we have just rewarded imprudence for past performance. The "moral imperative", as it's usually called these days, states that banks will now view this scenario as likely to happen again should trouble arise from future imprudent lending practices. The long term risk-reward relationship has been altered in ways we cannot foresee. Thirdly, as I stated above, our European partner's eye-brows will have been raised at the very least. The four big nations or banks are meeting tonight. I'd love to be a fly on the wall.

Look, if Cowen and Lenihan pull off this stroke, fair play to them. They have leveraged our position in the Euro to full effect, as well as our position in the Euro zone. I believe this stroke couldn't have been pulled off under a punt regime. However, Trichet, who was never too pleased with countries who pursued the property blitz, will be remembering how one country took it upon itself to unilaterally use their position in the Eurozone for their own benefit. And god help us if we do real damage to the UK banking sector. The UK's reaction will make the black and tans look like party clowns.

I would imagine that alot of money won't come in because they reckon that the Irish Government couldn't pay up on this guarantee.

It is a giant bluff in a game of world poker. It is probably ninety per cent likely to pay off but there is the ten per cent chance that the trap door will be pulled whilst the noose is around our necks.

johnfás wrote:

I presume we are all aware that it takes about 6 months for the Commission to investigate anything and their decisions can be appealed to the European Court of Justice. It currently takes about 18 months to get a hearing at the ECJ so by the time Europe can do anything this guarantee will have expired. I would assume that it was partly on this basis that they made the decision.

As I have said here before, there are also countless manners in which you can derogate from virtually all provisions of Community law. On the grounds of national security and such like. I'm sure they'll be able to make a pretty good argument on that basis in 2 years time if the thing ever comes to a hearing.

As I have said, more likely is a device put in place by the ECB which makes our guarantee redundant anyway.

None of this is likely to help us if we have to go begging to the ECB.

Brian Cowen has just said of the Banks

"Not having access to capital is no excuse for not doing business"

- how exactly does he think Banks work ?

Prime Time earlier tonight

http://www.rte.ie/news/primetime/
http://www.rte.ie/news/2008/1002/primetime_av.html?2431037,null,230

p.ie thread
Pin Thread

The Financial Regulator Mr. Pat Neary is not answering questions at all. Has he been in the same country as the rest of us the last decade and a half? I don't think he was at all - I'd say he was hauled out of a clerk's office where he was studying some regulation archives from the 19th Century, that way he won't panic anyone when Mark Little says there's over 100 billion outstanding to irish banks from developers and what are the chances that's going to be paid to the banks? There are half a million euro houses lying idle around here now among other projects indeed there are housing estates which have nothing but lights on at night. What are the chances of getting 95% of that money back leaving us with a 6 or 7 billion euro bank bill?

In other news, scientists find unmelted snowball in volcano ...

Auditor #9 wrote:

Prime Time earlier tonight

http://www.rte.ie/news/primetime/
http://www.rte.ie/news/2008/1002/primetime_av.html?2431037,null,230

p.ie thread
Pin Thread

The Financial Regulator Mr. Pat Neary is not answering questions at all. Has he been in the same country as the rest of us the last decade and a half? I don't think he was at all - I'd say he was hauled out of a clerk's office where he was studying some regulation archives from the 19th Century, that way he won't panic anyone when Mark Little says there's over 100 billion outstanding to irish banks from developers and what are the chances that's going to be paid to the banks? There are half a million euro houses lying idle around here now among other projects indeed there are housing estates which have nothing but lights on at night. What are the chances of getting 95% of that money back leaving us with a 6 or 7 billion euro bank bill?

In other news, scientists find unmelted snowball in volcano ...

I didn't realise the Property Pin had gone so far down the "boo hoo it's all a conspiracy by the elites" road.

ibis wrote:

I didn't realise the Property Pin had gone so far down the "boo hoo it's all a conspiracy by the elites" road.

Why does this fact always surprise you ibis?

Seriously though - are you confident that the Developer's Guild will pay all that 100 billion+ back? Which is now due to the country?

Auditor #9 wrote:

ibis wrote:

I didn't realise the Property Pin had gone so far down the "boo hoo it's all a conspiracy by the elites" road.

Why does this fact always surprise you ibis?

I have enormous (and perhaps misplaced) faith in human nature. It surprises me that people can't see the intellectual sterility of ascribing everything to 'elite conspiracies'.

Auditor #9 wrote:

Seriously though - are you confident that the Developer's Guild will pay all that 100 billion+ back? Which is now due to the country?

That I don't know. I do know that whatever happens we would wind up paying that bill one way or another.

On the conspiracy thing - I just came across the post by daithi31 where he criticises the board for becoming armchair economists with big, sharp teeth and nothing else to do but prey on mistakes. There's no doubt that board has that slant and probably in the wrong proportions. There's a lot of negativity there. However, I think it might be a barometer of what is to come on a larger scale when a lot of people might become very embittered if we find ourselves again in the pit of hell that was the eighties. Remember how crap that was? This time we could have been a little more prepared for it in terms of infrastructure and health, education system, energy etc.

Of course you're right about the bankers bill - everyone has to bend over for that. The other option might have been to allow a rake of developers to go bust, allow house prices to plummet (i.e. adjust) and nationalise some banks - the worst ones or most exposed then provide a ton of social housing or affordable housing to the people around the place with proper ways to control it so that you can't buy 4 of them and therefore put me out of the chance of getting one.

The storm is coming and it's best that our people have roofs over their heads...

ibis wrote:

I have enormous (and perhaps misplaced) faith in human nature. It surprises me that people can't see the intellectual sterility of ascribing everything to 'elite conspiracies'

But human nature is at bottom, self-interested or 'greedy'. Let's face it, for some people they are the same thing. I buy one house but my neighbour buys 4 more ... she's greedy for more security, more free time more more more. She might just stupidly get a rake of mortgages because her girlfriends are all at it - why not?

Now she's credit crunched and needs 5k per month just to cover her bills. Now, if human nature is fundamentally self-interested to the extent that in some cases the appetite is so big that the person eats twice as much, thereby depriving someone else - something that dogs might do with food but cats don't really do that. If human nature is fundamentally like this then shouldn't we have 'shepherds' tending the flock? i.e. channelling, moderating or regulating it in some way? As things get bigger and easier to get like a house or a big car then it's necessary to impose restrictions on folks otherwise we'll all end up living in places the size of Barefield church, driving a massive Lexus ...

There's an elite there and they have clout - don't you think? It might not be a small group either ...