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Doherty calls for nationalisation of banks

26 May, 2009 - by Pearse Doherty TD

Speaking in the Seanad this afternoon Sinn Féin Senator Pearse Doherty called for the immediate nationalisation of any banks that are in need of Government aid as part of a short to medium term response to the banking crisis. He said the proposal for a National Assets Management Agency (NAMA) is unworkable.

Senator Doherty said,

“The Irish banking sector is in a crisis so serious that it is threatening to engulf the whole economy. Businesses, that are solvent and profitable in the long run but treading water in 2009, are being denied access to larger overdrafts or short term loans that could see them through the ongoing bottoming out process. ISME reported less than two weeks ago that 58% of their members had been refused credit

“There is no silver bullet solution to the banking crisis, but as part of a short to medium term response, we propose immediate nationalisation of any banks needing government aid - without government or public liability falling on the tax payer for the imprudent lending and corporate failures of the management of these enterprises.

“Sinn Féin has always believed that there is an argument for creating a state bank that will give credit to and invest in small and medium enterprises (SMEs), that protects family homes and that will restore confidence in the Irish economy.

“We urgently need a state owned bank that will invest in growing Irish business, providing the seed corn for not just new start ups but the new generation of R&D in green technologies, in alternative energy production, in the new safe organic food products, in the bio tech, software, digital technology, creative and communication sectors that will provide the next decades of jobs on this island.

“We need a bank that will offer low cost services to Irish households, funding new homes, lowering the costs of paying for existing ones.

“The proposal for a National Assets Management Agency is unworkable. Sinn Féin supports immediately establishing one single Private Legacy Bank as alternative to NAMA, whereby the toxic debts of the 5 institutions under the Guarantee Scheme would be administered and that all liabilities will remain with the developers and banking investors.

“The Government needs to urgently create transparency by supplying full details of the distressed assets and non-performing loans held by all banks seeking or in receipt of state aid.

“The Swedish model of tough action, quick nationalisation, cleaning of toxic debts from insolvent banks and the creation of commercially viable short term state owned banks, along with an independent valuation board to determine the real value of distressed assets in the legacy banks is the most appropriate model for developing government policy right now.

“We have a legacy of banking corruption hidden from the public. The DIRT debacle, the NIB interest loading on customer accounts, the facilitating by all Irish banks of illegal offshore accounts so that a wealthy elite could avoid paying tax, and the 2006 AIB foreign currency overcharging scandal, cumulatively show that systematic corruption was a way of life in the higher echelons of Irish banking. From the illegal Ansbacher accounts of the wealthy elite to directors’ private loans and the Anglo Irish share dealing scams, this country has been plagued by endemic corporate malpractice by Ireland’s senior banking executives.

“On the very day that Brian Cowen was meeting Irish bank chiefs last September to put the final touches to a €440 billion bank guarantee, at least two of those executives were involved in deposit transfers involving billions of euro designed to actively deceive financial markets and the general public. We were being lied to in September and we have no guarantees we are not being lied to today.

“Sinn Fein supports the pursuit of criminal prosecutions and civil actions against executives involved in the corporate malpractices outlined above and we strongly believe that such executives should be banned from taking any posts in the financial sector or holding any directorships in any other business area.” ENDS

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