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Government Bonds

Dáil Éireann Debate, Tuesday - 21 May 2013

Tuesday, 21 May 2013

Questions (283)

Gerry Adams

Question:

283. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 51 of 9 May 2013, if he will detail if he has discussed with the Central Bank of Ireland Governor of the scope for the Governor to conduct further discussions with various members of the euro system to borrow unused financial asset holding capacity for the Central Bank of Ireland to increase its holdings in Irish Government bonds through acquiring these bonds on the secondary market and thus returning the interest to the State paid on these bonds through the Central Bank of Ireland's profits; if he will consider discussing with the Governor of the Central Bank of Ireland to acquire those Government bonds on the secondary markets from Bank of Ireland, Allied Irish Bank and Permanent TSB thus reducing the balance sheet of those banks, freeing up capital costs for those banks who have to hold regulatory capital if retaining Irish Government bonds, reducing the amount of ECB funding that is extended on foot of the Irish Government bonds collateral to those banks and return the interest payable from the Irish Government on these bonds directly to the Central Bank of Ireland and thus ultimately back to the Exchequer from the Central Bank of Ireland profits; and if he will make a statement on the matter. [24320/13]

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Written answers

The Central Bank of Ireland (CBI) has confirmed that, in common with other National Central Banks of the Eurosystem, it can hold financial assets only up to particular limits as part of agreements between the various members of the Eurosystem. Furthermore the CBI has confirmed that the terms of such agreements and related issues are a matter for itself and the ECB and not something that I can comment on. As outlined in my response to PQ 19874/13, the CBI has advised that it does not comment on individual investment holdings.

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