New law will let Lenihan 'do what he likes with the banks'
Published 16/12/2010 | 05:00
THE Finance Minister last night acquired unprecedented powers to intervene in the country's bailed-out banks, under new legislation rushed through the Dail.
Fine Gael claimed the new legislation empowers the minister "to do whatever he likes" with the banks, as the Dail debated 77 sections and 66 pages of complex laws over four hours.
Despite the opposition's concerns about the "far-reaching" and "extraordinary" new powers, the Government passed the second stage of the Credit Institutions (Stabilisation) Bill with a comfortable eight votes.
The Finance Minister now has sweeping powers to restructure the banking sector, with provision to impose losses on subordinated bondholders.
Fine Gael's finance spokesman Michael Noonan said there were "extraordinary" new powers in the legislation.
"This is more a bill to empower the minister to do whatever he likes with the banking sector. I don't see many resolution measures in it," Mr Noonan told the Dail.
Labour's finance spokeswoman Joan Burton claimed the new laws were making the minister a "one-man legislature" with the power to amend or repeal the law of the land.
One section of the legislation, which empowers the minister to override Acts of the Oireachtas and to legislate contrary to their terms, came in for scathing criticisms.
"If we approve a section like that, we as members of the Dail might as well pack our bags early for Christmas and not come back at all in the New Year. The country will instead be governed by ministerial dictat," Ms Burton said.
The new laws will allow Mr Lenihan to control credit institutions without the approval of their shareholders, to move deposits across the banking system and to impose strict conditions on the injection of state funding into the banks.
This part covers the Government's move to legally block the €40m in AIB bonuses.
Ms Burton told the Dail the legislation was "too little, too late".
Had a resolution regime been in place when the banking crisis struck in 2008, much of the cost of the banking crisis that is now being borne by taxpayers could have been avoided, the Labour Party TD claimed.