Dáil Éireann Debate, Wednesday - 23 March 2011
31 Deputy Caoimhghín Ó Caoláin asked the Minister for Finance his view on the fact that the ten year bond yields have reached record high levels since the publication of the programme for Government; his plans to ensure that bond yields do not increase further; and if he will make a statement on the matter. [5396/11]
View answerThe yield on Ireland's 10-year bond, which stood at 4.48% at the end of the first quarter of 2010, was 9.49% on 21 March 2011. The yield spread over the German 10-year bond increased from 1.38% to 6.35% over the same period. The secondary market in Irish Government bonds is negatively affected by a number of factors at the moment, including uncertainty about the implications for the capital requirements of the Irish banks arising from the PCAR and PLAR exercises. In addition, there is some uncertainty regarding the final outcome of the current discussions on the various mechanisms for supporting the euro-area debt markets. The implementation of measures by the Government to create a healthy and vibrant banking system together with the resolution of the Europe-wide dimensions of the banking and debt crisis should help create the conditions in which confidence would begin to return to our bond market.
Furthermore, the Government's programme to support growth which will in turn underpin its jobs strategy will also assist in a more favourable view of Ireland over the medium term.
