Fine Gael will make banks work for the Negative Equity Generation – Noonan

Fine Gael Finance Spokesman Michael Noonan has today (Friday) launched the Party’s banking policy to bring Ireland’s banking sector back from the brink and stimulate economic recovery.

Speaking at the launch, Deputy Noonan said: ‘The aim of Fine Gael in Government will be to achieve a well-regulated, competitive, profitable, and privately-owned banking system. Crucially, given that the taxpayer has bailed out the banks, we believe the banks must now act in their interests. The banks must go to work for the negative equity generation.’

“We were right before. Two years ago, we set out an alternative banking policy that would have used the period of stability provided by the Guarantee to restructure the banks and, where appropriate, impose losses on the banks’ investors and bondholders. However, Fianna Fáil has landed the public with a €100 billion bill for the banks, while Labour’s plan to nationalise the entire banking system would have had the same result.”

Key proposals include:

• Increasing mortgage interest relief for the negative equity generation, to generate savings of up to €166 a month;
• Cutting bank costs to avoid interest rate hikes for the consumer;
• Ensuring that fraudulent bankers are pursued for their crimes and face the law;
• Shutting down Anglo Irish Bank and INBS before the end of the year;
• Halting future asset transfers to NAMA from Bank of Ireland, AIB and EBS;
• Making bond-holders share the burden of the debts of insolvent financial institutions. This can be done unilaterally for most junior bondholders, but should be extended – ideally as part of a European-wide framework – for senior debt for insolvent institutions like Anglo Irish and Irish Nationwide that no longer have any systemic economic importance;
• Introducing a partial loan guarantee scheme for small & medium businesses;
• Supporting the sale of AIB and the EBS;
• Diversifying sources of funding for our financial system to avoid being wholly dependent on European Central Bank funding;
• Shrinking the size of the bank loan books so that they are largely financed by domestic deposits.

“Under Fine Gael, Ireland will fight to regain its reputation as a centre of responsible finance and prudent, ethical banking. We will prevent the banks from ever again holding the country to ransom.”