The Taoiseach describes the circumstances we are in as an unprecedented disruption in financial markets. What we have seen in the past 24 hours is that a decade of corporate greed, property speculation and, in many cases, irresponsible banking has come home to roost. I accept the Government has had to act to deal with the crisis in banking and the financial markets. I hope it works.

However, I have several serious concerns about the Government's decision, the effect of which is to give a guarantee to the banks of almost three times our national income. It is a guarantee that, if called in fully, would take 37 years of income tax receipts to clear. I can see what is in this guarantee for the banks and their shareholders, some of whom have already made gains today on the strength of it. I can see what is in it for the six bank chief executives who between them earn €13 million a year. However, I cannot see what is in it for the people or the taxpayers who may yet have to foot the bill.

If the Taoiseach is proposing to hand over the deeds of the country to bail out the banks, what are we getting in return? I have heard him say there will be a charge, which, as I read it, will be passed on to bank customers anyway. This morning, the Minister for Finance told me conditions would be attached to this deal. Early this afternoon I had a briefing from his officials, but I still have yet to hear what conditions are being attached. I want to hear about them now.

Will the public effectively take all the risks for the banks while they get all the gains? The Taoiseach told Deputy Enda Kenny that the taxpayer will not be at risk and that the sector will discharge any call down the road. Will the Taoiseach explain this to me because I do not understand it?

Is it not the case that this guarantee will actually embolden the banks to take greater risks? What will the decision do to the nation's credit worthiness? The banks will be able to borrow but where will it leave the State's capacity to borrow? What does it do to the perception of the national debt? Will it be seen as the €46 billion it is or will the €400 billion guarantee be added to it?

Last night, due to what he describes as the unprecedented disruption in the financial markets, the Taoiseach could have bought a 50% stake in the entire banking sector for €5 billion. Instead he has given the banks a guarantee for almost €500 billion. The Taoiseach has not yet stated the nuts and bolts of this deal. What are the conditions? What are the banks being asked to return? What is in it for the public and the taxpayer?

What is in it for the taxpayer, for workers, for people with pension funds and for people who have accounts in banks is the first and most overriding priority of any Government, financial regulator or central bank in this situation, that is, to have a stable Irish financial system that is operational.

Hear, hear.

That is the most important thing. How far back do people think the country would be if we awoke this morning, in the absence of the State guarantee that has been offered in the way it has been offered, to find a failed banking system on our hands? What would be the situation then for Irish people or Irish workers? There are corporate organisations which must get access to funds, as well as employers and businesses which must get access to funds on an ongoing basis to conduct their business.

We know all that.

If we know that then what is in this for the taxpayer——

Yes.

What is in this for the taxpayer is clearly the ability to provide a stable banking system so all businesses and all people who have deposits and interests in the banks and in the commercial life of the country can have the prospect of continuing in the very abnormal situation we find ourselves in today. That is the first point.

The second point is that no money has been handed over by the State to the banks in relation to the provision of this guarantee. The State guarantee we have devised enables the banks to get access to funds. Deputy Gilmore's argument about the taking of equity completely misses the point. The taking of equity would not provide the liquidity necessary to maintain a stable financial system in this country in the short, medium or long term. The issue here is that solvent banks, which have assets in excess of their liabilities, are faced with an unprecedented situation whereby there is a credit crunch and they have an inability to access credit and liquidity in order to conduct business. That is a problem not only from the banks' point of view but from the point of view of everybody who deals with banks, including every citizen of this country. That is the situation that confronts us and what the Government is seeking to achieve here bears no relation to the misleading figure that is going around about the Irish taxpayer being exposed to a €500 million liability.

The Taoiseach should tell us the level of exposure.

Involved in that figure is the capital and assets associated with these institutions, which exceed the liabilities of the institutions in terms of the lending they have put out. The residual about which we are talking is the need to make sure they can conduct their business by having access to funds. I have not handed over money to any bank. I have provided the reputation of this State to those banks to put them in a position whereby they can get access to funds to continue in a stable financial system so the economic and national life of this country can continue. That is what was necessary. That was the full advice available to me from the regulatory authorities that are charged with the responsibility of advising the Government in this matter. Anyone who has a cursory understanding of what has been happening in the European and United States' banking systems in the past few weeks, let alone months, would understand the nature of the challenge.

That is the situation that faces the Government and a populist argument to the contrary, I am afraid, does not cut it because what we are trying to make sure of here is that when we are dealing with this situation as it stands, the first call will be on the shareholders. The shareholders will be the first to have a problem in the event of there being a problem with any bank in terms of how it conducts its business from here on. The State guarantee does not exclude them from the first responsibility. They have assets and capital in their banks and those funds will have first call should there be any deficit emerging. The second call is the secured loans which are underwritten by the European Central Bank. The point I am making and the commitment I am giving is that in the event of having worked out whatever had to happen in relation to those banks and those assets so the maximum return and value comes back, in terms of how one would deal with that situation over time, if a deficit emerged, the sector would pay, not the Irish taxpayer. That is my commitment to the House.

Hear, hear.

How?

That is very good, a Cheann Comhairle, but frankly I do not need any lecture at all from the Taoiseach about the importance of the banking sector to the economy. I remind him that as far back as 25 June last, I raised here with him the difficulties that were emerging at that time in banking. I raised the difficulties that people were experiencing with banks and the effect of the credit squeeze that was already beginning to be experienced then. I urged him at that stage, before the summer, to engage with the banks and the problems of banking in this country.

The Taoiseach makes it sound as though this guarantee does not amount to anything at all. If all of the figures that have been discussed this morning, ranging from €300 billion to €500 billion, are wrong then can the Taoiseach tell the House the extent of the State's exposure as a result of the guarantee, or if there is any exposure?

This is not about the Government acting because, as I said at the beginning, I hope this works. I am not criticising the Government for having acted but I want an explanation for the decision that has been taken. The explanation I am looking for and that has not been forthcoming as of yet, relates to a very simple point. If we are taking a risk as a State, which we are by providing a guarantee to the banking system, that risk ultimately lies with the taxpayer. What are we ——

What is the risk if we do nothing?

Let me tell Deputy Power, the Government has been doing nothing for quite a while now.

Hear, hear.

It would be reckless.

I ask the Deputy to direct his comments through the Chair.

When it comes to doing nothing, they are the specialists.

We have shown leadership.

That is why the Irish economy is in its current difficulties. However, we must deal with what we have. A decision was made to provide a guarantee. There is a risk to the State and the taxpayer in that. The banks will gain from it, which is obviously good for the banking sector, which will continue on. What I want to understand is if we take a risk, what is the return? What comes back? I have not heard that spelled out.

I hear the Taoiseach making all kinds of assurances that the banking sector will ultimately carry the can here, that the Government will ensure there will be good management practices, that there will be better regulation and so on. I want to see the nuts and bolts of that. We have not yet been issued with copies of the Bill that will give effect to this. Are the nuts and bolts of the conditions that are supposed to be attached to this deal spelled out and listed in the Bill? We have not yet heard what are those conditions. We hear lots of assurances and comments to the effect that it is going to be fine and that the Government will see to it and I hope that is right. However, if the State itself and ultimately the taxpayer has to bear a risk to bail out banking right now — if that is the way it is, then so be it — as representatives of the people in this House, we are entitled to hear what the extent of that risk is, what the return is and the conditions that will be attached to it but so far, we have not heard that.

With respect, I am trying to be as helpful as possible. The statement that issued this morning before the markets opened was a statement of principle, with clarity, by the Irish Government as to what its intentions were in relation to maintaining the stability of the Irish financial system. What we are bringing forward today — I appreciate the co-operation of the House in this matter — is legislation to give effect to that statement and to ensure the powers that will be exercised by the State have a full statutory basis, in terms of the guarantee and the various mechanisms and arrangements that we are putting in place to bring about a situation where liquidity is available to the Irish banks.

The State guarantee, that is, the paper provided by the Government as a result of this morning's statement, enables people to go to wholesale markets and counter parties to obtain funds and to do so in the knowledge that the Irish Government is providing a guarantee on all deposits that would subsequently emerge as a result of those banking transactions into the Irish banking system for a period of two years, ending on 28 September 2010. We believe that was the period necessary in order to convince the market, with credibility, that the Irish Government was serious about what it was saying and doing. The indications today are that our signal to the market has been, thus far, successful. Regarding the risks, the greatest risk to the stability of the financial system of this country was, undoubtedly, on the basis of my very detailed discussions, looking at all the issues with the Minister for Finance and others yesterday evening after close of business, until the decision was made in the early hours of this morning, to do nothing. To make no move would put at risk the stability of the Irish financial system. In the office that I hold, I could not absolve myself from the responsibility of making the decisions. On the advice of the relevant people who have the competent authority in this area, I had to make that decision. Government made that decision with the impact that it has since had. That was the situation.

It is a question of looking at the situation that we are in, that has been caused by the turbulence of financial markets, what has been happening in Germany, the Netherlands, Belgium, the United Kingdom and the United States. A situation emerged and it was made clear to me that this was what was required. All the various aspects of this were discussed in detail and we came forward with a statement which emerged this morning. The legislation this evening will set out the mechanism that we are putting in place.

Fees will be charged for the State guarantee for the duration and for those banks that need it. If they have sufficient liquidity as a result of what has been emerging in recent hours, and what will e merge in the next days and weeks, they will not call on that liquidity at all times from the Central Bank, but where they do, there will be a fee for it. There will be a price for it.

The overall benefit for the Irish system and the Irish economy is that we have, hopefully, the functioning of a system that meets the requirements of the nation's economy and the nation's commercial and national interests. That is the situation we are in.

I understand that this is a difficult situation for everybody in terms of not having prior viewing of the legislation, which is in preparation and which will be available this evening. I thank the Members of this House for the co-operation that they are giving and for the understanding of the seriousness of the work that we are all doing here on behalf of the State to bring the necessary stability to this system and to ensure that we serve the people, given the very precarious circumstances with which we have been confronted in the past 24 hours.

Why can he not answer the questions?

Sin deireadh le Ceisteanna ó Cheannairí inniú. That is the end of Leaders' Questions.