Bank Guarantee Scheme

Dáil Éireann Debate, Tuesday - 24 January 2012

Tuesday, 24 January 2012

Questions (146)

Michael McGrath

Question:

166 Deputy Michael McGrath asked the Minister for Finance if a new framework is being put in place to govern the relationship between him, AIB and Irish Life and Permanent respectively to reflect the increase in the State’s ownership stake in these institutions; if the relationship agreements with Anglo Irish Bank and Irish Nationwide Building Society have formally lapsed following the merger of those institutions in July 2011; the progress that has been made on putting in place a framework in respect of the relationship with the Irish Bank Resolution Corporation; and if he will make a statement on the matter. [4101/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

The Department is currently finalising new Relationship Framework documents for each financial institution in which the State has a shareholding. The framework documents, which generally formed part of the recapitalisation agreements, will define the relationship between the Minister and the relevant institutions. These documents will be drafted and structured to ensure that the institutions will operate on a commercial basis and independent of the Minister in respect of their day to day operations. The role of the Minister will also be set out and will reflect his shareholding in the relevant institution and also the other support provided to that institution.

In the case of IBRC there is an existing Relationship Framework in place. Following the combination of Anglo and INBS the existing Relationship Framework applied to the merged entity. This document sets out the respective roles and responsibilities of both the Minister and the bank. In general terms the Board is responsible for the day to day operation of the bank and the Minister as sole shareholder retains certain "reserved matters" over which his express permission or approval is required. The Relationship Framework is currently being revised to reflect the changed situation following the combination of Anglo and INBS to form IBRC.