I wish to ask the Taoiseach about the latest debacle to erupt in banking circles. I understand from comments made today by the Minister for Finance, Deputy Brian Lenihan, that yesterday evening a proposal from Allied Irish Banks was dropped into the Department of Finance. This proposal was obviously not dropped in on a whim. It was for the appointment of a person as managing director of AIB, on a salary of €633,000.

As I understand it, the State has 25% control in AIB. The Government gave it €3.5 billion in preference shares, intends to acquire the loan book for an assumed figure of €24 billion and has guaranteed all its liabilities. I understand the Cabinet discussed this matter this morning. The Taoiseach is well aware of the importance of our country's reputation, the credibility of our banking system and the integrity that goes along with that. Was there any contact between Allied Irish Banks and the Minister for Finance or his Department concerning this matter? Does the Taoiseach support the proposed appointment, given that this person is an insider, has been on the board since 2003, has been central to many of the lending practices of Allied Irish Banks and will not do anything to enhance the reputation of the Irish banking system in general? What is the Taoiseach's view, arising from this latest debacle in banking circles? Effectively, the Government has been given another major snub, following what happened with Bank of Ireland.

The Minister for Finance outlined the position regarding this matter which came into the public domain during the past 24 hours before he was in a position to consider the appointment and report to the Government today. The Government reiterated its position of 11 March when it noted the content of the first report of the covered institutions' remuneration oversight committee which looked at salaries in this area and agreed to the report being available to both Houses of the Oireachtas and the public. It also agreed the Minister for Finance would write to the financial institutions asking them to revise their remuneration plans in such a way as to respect the salary cap of €500,000 or the amount recommended by the committee, whichever should be the lesser. We simply confirmed that was our position. I am sure discussions are ongoing between the bank and the Department, arising from that communication by the Minister in respect of correspondence that came into his office last night and was in the public domain before he had an opportunity to consider it. That is where matters rest. It is important, in the interests of effective management of the bank, which is in all of our interests, that we allow the process to develop with a view to finding a resolution that is consistent with the Government position.

I am sure the Taoiseach is aware of the reaction of people, particularly the young, to the situation. This is one of the major institutions centrally involved in the financial and economic debacle in which we find ourselves. It is one of the major institutions in respect of which Mr. Trichet today referred to countries losing their reputations and credibility.

The Government effectively has 25% control of the bank and the Minister for Finance has stated that we are deeply embedded in the banking sector. Clearly, an insider is being appointed to the job. Minister after Minister has been discussing prescription charges of 50 cent and cutting child benefit and every other allowance of which one could think while Allied Irish Banks has proposed, not on a whim, to the Department of Finance that a person be appointed as the bank's managing director with a salary grossly in excess of the Government's guideline. This breaches every ethical guideline of good corporate governance and does nothing for our country's reputation or the attempt to sort out the banking situation. The Government is being told that it has no moral authority, has lost credibility, is losing integrity and that the bank will do what it likes.

The Government gave the bank €3.4 billion in taxpayers' money, guaranteed all of its liabilities, will buy its loan book for €24 billion and controls 25% of it. Everyone else is being forced to take pain on all levels, but a proposal was dropped into the Department of Finance by the bank at 7.30 p.m. and discussed by the Cabinet this morning. Now, there is neither a managing director nor credibility of Government.

Hear, hear.

Why has this matter not been dealt with decisively by the Government in view of the State's control? Neither we nor the bank know what is occurring and the Government will not say. Surely there is someone among the Irish diaspora who is objective, external, would do the job for €500,000 and would clean up the bank within 18 months. The person proposed to be appointed was centrally involved in lending practices in an institution that was partly responsible for the current debacle.

What is this doing to the attempt to restore credibility to banking institutions and our financial credibility of which the Taoiseach and Ministers spoke in recent weeks? Does the Taoiseach support AIB's proposal on the appointment of a managing director on a salary grossly in excess of the guidelines set by the Government? He is an insider and his role as managing director is not in keeping with the best standards of good corporate governance.

Hear, hear.

It is important for Deputy Kenny to realise that the whole purpose of the Government is to ensure that we have effective management structures. The board of the bank has brought forward the name. It is unfortunate that Deputy Kenny is engaging in a very strong personal attack. This is not a matter that I wish to deal with in that way.

It is not a personal attack. The Taoiseach should withdraw that comment.

It is a fact.

I did not attack his good name or his character.

The Taoiseach without interruption.

It is business, not personal.

Do not try to twist it.

All they want is our money, but the Government is out of money.

Deputy McGinley, please.

This is not a matter that I wish to deal with——

Grab NAMA and get away with it.

It was the Taoiseach's Ministers who said that these were the people who led the country into this situation.

That is right.

The Taoiseach without interruption.

This is not a matter that I wish to deal with in this way, as has been suggested by Deputy Kenny.

More of the same.

Backtracking.

The situation is that the Government has made clear the arrangements in respect of our position regarding the filling of a position of a CEO in line with the decisions that we communicated in March. That is the position. The board brought forward the name of the person it felt to be the person best qualified, given all of the choices that it had based on those who were available to do so, to run the bank. An issue came into the public domain this morning before the Minister for Finance had given proper consideration to it or been given an opportunity to consider it. He has now communicated to the bank the position that he holds, supported by the Government, and we now await developments in that respect.