Lenihan defends delegation of banking functions to NTMA

 

MINISTER FOR FINANCE Brian Lenihan has told the Dáil that the National Treasury Management Agency (NTMA) will lead discussions on the capital needs of the financial institutions, although Department of Finance officials will attend the talks.

He was responding to Opposition concerns about a transfer of functions from the department to the NTMA, and claims earlier from Labour finance spokeswoman JoanBurton that it “seems as though the ducks are being put in a row to provide for the full or almost full nationalisation of the banks”.

Ms Burton asked if Mr Lenihan “has lost confidence in the Department of Finance because of the way it has performed in the financial collapse”.

The Minister insisted, however, that “the demands of the crisis have required significant adjustments in the deployment of resources in both organisations”.

“The recent passage of the Nama legislation, together with the appointment of a new secretary general at my department, who took up work on Monday last, provided me with an appropriate opportunity to consider further the division of work between my department and the NTMA.

“The department will remain necessarily very closely involved with banking and financial services issues,” and he would remain fully accountable to the House.

Fine Gael finance spokesman Richard Brutonalso expressed concern about the delegation of functions to the NTMA “which have a very intimate bearing on banking policy for the State”.

“The Minister for Finance is delegating substantial responsibility for banking to the NTMA.”

Mr Bruton added that the NTMA “does not have the same Dáil scrutiny, so taxpayers do not have the opportunity to oversee its activities, including the conduct of discussions with the banks on their capital needs, on the restructuring of the banking sector, and on the guarantee.

“These are at the core of central policy issues as to how we are going to deal with the banks, who have brought this country to its knees.”

Mr Lenihan said “the NTMA and the department are working very closely together. A draft delegation order is currently being discussed with the office of the Attorney General”.

He said the NTMA would lead discussions on the covered institutions’ financial requirements “although officials from my department will be present because that is an area in which they have considerable expertise”.