Some humility is called for from the banking community
Today’s Order of Business focused on the continuing story of the financial situation and the news that came from Aer Lingus last night. Here’s an edited transcript of what I said:
Some humility is called for from the banking community and especially its leaders. We have all suffered from sleep deprivation in recent days given the onerous task which was before us. However, I had to rub my eyes when I heard that one of the individuals concerned made a series of demands regarding what the Government should do with universal child benefits, which he believed should be attacked, State pensions, and that medical cards for the over 70s should be abolished. This proposal comes from one of the people who were saved and whose bank was in some difficulty last week. If this person has trouble with his day job, which appeared to be the case last week, perhaps he could have a future in the entertainment industry as a comedian of some sort?
For this person to suggest to the Government that it should consider such cuts when he has been the beneficiary of such largesse, the extent of which we do not yet know, seems extraordinary.
Today the Irish Congress of Trade Unions sponsors a very important event, called the world day for decent work, which I wish to comment on briefly. Such days come and go and frequently they do not mean much, but this is important. The notion and principle of regulation have been dirty words for two decades. However, they are suddenly back in vogue in certain quarters because of the banking crisis. Aer Lingus announced today its intention to chop off whole sections of its operation, replacing reasonably well paid jobs with what inevitably will be lower paid jobs.
In those circumstances, it is timely that we should draw attention to the fact that approximately 200,000 people in this country earn less than €10 an hour. That is the reality of what an army of low paid and low skilled employees are facing. I call for a debate on unemployment but we must look to see what we are talking about in that regard. It is not just a notional issue. These are real people who face real challenges in terms of living their lives on low pay and without much hope being offered to them by the Government. We should have that debate.
Everybody is now coming around to the view held by those on these benches that regulation is something that should be examined again.
Senator:
You are undoubtedly a person with very highly developed senses of honour, integrity, and ethics. With that said, it is worth considering that the person to whom you refer above does not possess these very admirable qualities in an abundance approaching your own. Let us assume for the sake of argument that the person being discussed is not real, but entirely fictitious. It is, at the very least, worth recognising that the person may be a director of a company whose primary duty to that company in that capacity is to protect and promote the company’s interests. In pursuit of this duty a person may (some would argue should) engage in conduct which appears both morally reprehensible and repugnant, needing only to ensure that such conduct is legal. Now please consider the following:
1.) An individual or consortium has just secured what it believes to be an effectively incontestable guarantee from a stable government insuring it against any conceivable financial loss incurred while acting in the course of its business.
2.) This guarantee was secured without the need to give any real evidence in public as to why the guarantee was required. The individual can therefore not be held accountable for false or misleading statements.
3.) The guarantee secured is largely only beneficial in the event of default on obligations owing to a covered entity.
4.) The guarantee, once coverage has been arranged by entering into an agreement with the Minister for Finance, is still only operative for a finite period of time beginning on the relevant date. My interpretation of the enabling legislation limits financial assistance under the Act to compensation for losses incurred on or before 29 September 2010.
Given the above scenario and, as difficult as it may be in this situation considering that the roles of public representative and company or bank director are in this scenario potentially quite dissimilar, assuming the role of company director having due regard to the nature of outstanding loans peculiar to one’s own company, might one enquire what a responsible company director would suggest with regard to pensioners, universal child benefit, State-supported health coverage, or indeed any other State benefits which would tend to postpone or reduce the likelihood of defaults?
I sincerely hope that I have been engaging in conjecture and speculations which someone more knowledgeable would be kind enough to disprove.
Given that the Houses of the Oireachtas have been skilfully manoeuvred into passing what may prove to be Western Europe’s most comprehensive and expensive package of legislation aimed at protecting banking interests, a certain lack of humility as described above is not altogether unexpected.
It is possible that such a hypothetical person as above would have a future as a comedian. I am not at all convinced that there was any real danger of that person losing his day job, however. Quite aside from that, I do not find the comments made terribly funny. Rather, I would speculate that these were made in all earnestness.
There seems to be no easy way out of this, as the legislation has already been passed. One might hope that, as the legislation provides the Minister for Finance with power of a discretionary nature, the Minister might see fit to show some restraint in entering into the agreements provided for in the Act by limiting such agreements to institutions conclusively and indisputably shown to be at genuine risk of imminent failure.
That was Sean Fitzpatrick of Anglo Irish Bank who was calling for all the cuts in social welfare, children’s allowances etc … very nice of him. He of course expects his bank and others to be bailed out by the money of said people.