Tuesday, 19 February 2013

Questions (277)

Seán Ó Fearghaíl


277. Deputy Seán Ó Fearghaíl asked the Minister for Finance his views regarding the winding down of Irish Bank Resolution Corporation; and if he will make a statement on the matter. [8721/13]

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Written answers (Question to Finance)

As the Deputy will be aware, on 7 February 2013 the Oireachtas passed legislation (Irish Bank Resolution Corporation Act 2013), appointing joint Special Liquidators to IBRC with immediate effect to wind up its business and operations. A key element of the restructuring of the Promissory Notes was the liquidation of IBRC. The disappearance of the former Anglo Irish Bank and former Irish Nationwide Building Society from our financial, political and social landscape was long overdue. They became emblems of a culture of cronyism that undermined the confidence in both our economy and our political system. They became a stain on our international reputation and dent to our national pride. There are numerous benefits from the arrangement that have been undertaken. There are efficiency gains from housing ‘legacy assets’ in a single vehicle, NAMA. Exceptional Liquidity Assistance and the inherent risk associated with short term borrowings has also been removed from the Irish banking landscape. There is also an expected reduction in the underlying deficit by c.€1 billion per annum over the coming years with a reduction in government debt over time.

The Special Liquidation Order, made under the Irish Bank Resolution Corporation Act 2013, is no different from other liquidations and for employees in IBRC their employment was terminated with immediate effect following the passing of the Act on Thursday 7th February. There is no doubt that this will have come as a shock to the employees in the bank. It is unfortunate that it was not possible to give more notice on this matter and I regret the abruptness of how this decision was communicated to the management and staff. However it was imperative to keep the matter confidential due to the scale, sensitivity and complexity of the economic issues involved. As previously stated I want to acknowledge, with much appreciation, the significant efforts the directors and staff of IBRC have made to the stabilisation of, and maintenance of value in, IBRC. Nonetheless, unlike in other liquidations many of the employees have been be re-hired by the Special Liquidator, some of whom will be employed for the duration of the liquidation on such terms as he may determine.

The Special Liquidators have confirmed to IBRC staff that there will be no termination of contracts within the first 3 months of the liquidation. Some staff may be offered positions with NAMA or with other purchasers of the assets, to continue to manage the loan portfolios.