Tuesday, 19 February 2013

Questions (267)

Patrick Nulty

Question:

267. Deputy Patrick Nulty asked the Minister for Finance if he will confirm whether the European Central Bank ever threatened to end liquidity funding to Irish banks if Anglo-Irish Bank / Irish Bank Resolution Corporation was liquidated by the State in the time previous to the bank deal of the 6/7 February 2013; and if he will make a statement on the matter. [8420/13]

View answer

Written answers (Question to Finance)

As the Deputy is aware, the Government’s approach to the discussions with our European partners has always been constructive and consensual. This approach has been very successful to date, as witnessed in the developments earlier this month, and by meeting our commitments and engaging in constructive dialogue with our European partners we expect further results in the future.

The Central Bank of Ireland (CBI) and ECB provide funding to Irish banks under various arrangements. The funding decisions relating to the other Irish banks made by the CBI and ECB were independent of the situation with regard to IBRC. Funding via exceptional liquidity assistance (ELA) was provided to IBRC by the CBI with the express knowledge of the ECB.

However, from both the CBI and ECB’s viewpoint the use of ELA for long term funding was problematic. ELA is only ever intended to be a temporary funding arrangement and as such the conclusion reached with regard to the Promissory Notes is a very positive outcome.