Labour outlines its stance on bank plan

THE LABOUR Party has outlined eight key principles that it says must underline the recapitalisation programme including a two- year moratorium on family home repossessions.

Ahead of the Government’s €7 billion, recapitalisation announcement, Labour deputy leader Joan Burton yesterday launched a new policy document setting out the principles.

She said the principles reassure the public about the programme and also deliver a major reform of the banking system. She said the moratorium on mortgage payments was a “two-year breathing space for hard-pressed families”.

The eight principles are:

Getting credit flowing to business including drawing down funds from the European Investment Bank.

The accurate identification of the true scale of bad debts to give reassurance to the international markets. This included sharing information from the PricewaterhouseCooper report on asset quality in the Irish banks.

The write-down of impaired assets to prevent a repeat of the Japanese experience with “zombie banks” which hid bad debts.

The setting-up of an Irish banking commission that would approve appointments to boards of Irish banks and monitor their business plans and overall debt situation. It would also oversee the setting of directors’ and executives’ pay.

“Regime change” in the banks and a cap on executive pay. Ms Burton said that the 25 per cent suggested by Government was not enough and that no executive should be paid more than the €250,000 salary of the Minister for Finance.

A full investigation of Anglo Irish Bank, including the “warehousing” of directors’ loans.

A moratorium of two years on family home repossessions.

The retention of mutual building societies in Ireland.

Unveiling the document yesterday, Ms Burton said that a two-year moratorium was a more appropriate period, rather than the one-year period agreed by Government and the banks.

She also said that she was deeply concerned that the Government was “side-stepping” the issue of bad debts in the banks.