Dáil Éireann debate -
Tuesday, 1 Feb 1994

Vol. 438 No. 1

Written Answers. - National Treasury Management Agency.

Micheál Martin

Question:

24 Mr. Martin asked the Minister for Finance if he will give the National Treasury Management Agency statutory responsibility for the debt management of the semi-State bodies, local authorities, health boards and other agencies of the State; and if he will make a statement on the matter.

Minister for Finance (Mr. B. Ahern)

I have no proposals to bring forward legislation to give the National Treasury Management Agency statutory responsibility for the debt management of semi-State bodies, local authorities, health boards and other agencies of the State.

The national debt is in excess of £28,000 million and is by far the biggest portfolio of debt in the State. In the circumstances it is important that the agency should concentrate all its attention and resources on the management of this portfolio so as to keep the cost of servicing it to a minimum. It is the responsibility of the boards of semi-State bodies and other agencies of the State to look after the operations of their enterprises and it would not be appropriate to take the vital function of debt management from them. In any event, a number of semi-State bodies have sophisticated debt management operations in place and in some cases are selling their debt management expertise to other organisations.

There are also other important operational and policy considerations which strongly suggest that the National Treasury Management Agency should concentrate on the National debt. As agent for the Government the National Treasury Management Agency commands the best borrowing terms. As agent for other State bodies it would not get such fine terms. Lenders decide on credit risk on the basis of the underlying borrower and not by reference to the borrowing agency. If all the borrowing was done in the name of the Government then it would be part of the national debt and this would undermine the commercial nature and independence of bodies outside Central Government.