Written Answers Nos. 50-57
50. Deputy Michael McGrath asked the Minister for Finance the amount of cash reserves currently held by the National Treasury Management Agency; the anticipated amount that will be held at 31 December 2013; if the NTMA has any plans to borrow further money on the markets; and if he will make a statement on the matter. [48727/13]
View answerThe cash balance at the Exchequer account along with other short-term cash management balances, which are managed by the National Treasury Management Agency (NTMA).I am informed by the NTMA that the Exchequer had €21.9 billion on hand in Exchequer cash and other short-term cash management balances at the end of October 2013.
On 1 October the NTMA announced that it would defer consideration of any further medium/long-term issuance until early 2014 in view of its relatively strong funding position. Treasury Bill auctions for the final quarter of 2013 have also been suspended.
Budget 2014 projected Exchequer cash balances of approximately €21.5 billion at the end of this year, sufficient to cover between twelve and fifteen months of estimated Exchequer financing needs. The 7-year extension in EFSM/EFSF maximum average maturities during 2013 along with the February IBRC Promissory Note transaction significantly reduce our funding needs in the coming years. These positive developments strengthen Ireland’s ability to access medium to long-term market funding, which is expected to be in a range of six to ten billion euro during 2014.
51. Deputy Michael McGrath asked the Minister for Finance if Permanent TSB have been indemnified against any future losses at Newbridge Credit Union in excess of the losses covered by the injection of €53 million in capital; and if he will make a statement on the matter. [48774/13]
View answerI have agreed to the Governor of the Central Bank’s request for the payment of a financial incentive to transfer the assets and liabilities of Newbridge Credit Union to Permanent TSB (excluding the premises) of up to €53.9m. This involves:
- €23m in cash up front (to fill the hole in the balance sheet);
- restructuring and integration costs €4.25m;
- €2m for other transferring liabilities; and
- a risk share on the transferring loans whereby the State will absorb 50% of the losses where loans perform below their transfer value and 50% of the gains where they perform above the transfer value. If these loans were written off entirely with no recovery this would result in an additional €24.7m total cost.
Permanent TSB has not been indemnified against any future losses at Newbridge Credit Union in excess of the losses covered by the financial incentive of €53.9m.
52. Deputy Michael McGrath asked the Minister for Finance if he intends to put additional money into the credit union fund following recent events at Newbridge Credit Union; and if he will make a statement on the matter. [48775/13]
View answerThe Government has set up two funds to support the stability of the credit union sector. The Credit Union Fund contains €250 million for the purpose of voluntary restructuring under the Credit Union Restructuring Board - ReBo.
The Government put €250 million into the Resolution Fund which was set up under the Central Bank and Credit Institutions (Resolution) Act 2011. The Resolution Fund provided support for the transfer of Newbridge Credit Union to PTSB. As the incentive will cost up to €53.9 million, I do not envisage additional money being required for the Fund at this time.
53. Deputy Michael McGrath asked the Minister for Finance when a full report setting out the details of the cause of the financial difficulties at Newbridge Credit Union will be available; and if he will make a statement on the matter. [48776/13]
View answerThe Central Bank has published an extensive range of material on its website in relation to the Newbridge Credit Union transfer process including details on the background to this decision. This information includes a resolution report prepared for the Governor of the Central Bank and an affidavit prepared for the hearing on 10 November in the High Court.
54. Deputy Michael McGrath asked the Minister for Finance if there are any implications for the Insurance Compensation Fund from recent events at RSA Ireland; if RSA Ireland sought assistance from the Insurance Compensation Fund; and if he will make a statement on the matter. [48777/13]
View answerThe Insurance Compensation Fund (ICF) was established under the Insurance Act, 1964 (the Act). Under the Act only court appointed administrators and liquidators of insurance companies can apply to the courts for access to the ICF.
No administrator or liquidator has been appointed to RSA Insurance Ireland by the courts and therefore there are no implications for the ICF.
55. Deputy Michael McGrath asked the Minister for Finance his views on whether the National Asset Management Agency can assist in improving the supply of houses available to rent or purchase in the Dublin region; and if he will make a statement on the matter. [48778/13]
View answerNAMA is making and will continue to make an important contribution to new supply in the Dublin residential property market. I outlined in my Budget 2014 speech that it is NAMA’s expectation, at this juncture, that its funding will contribute about 4,500 houses and apartments in terms of new supply in the Dublin market in the period to 2015. This is a significant output in the context of current house completion levels in Dublin. In 2012 just over 1,200 new houses and apartments were completed in Dublin.
In addition, NAMA is overseeing the rental by debtors and receivers of close to 10,000 residential properties nationally, mainly apartments in Dublin. This reflects the strong rental demand for apartments in Dublin. NAMA is also overseeing the sale of houses in Dublin by NAMA debtors and receivers and has made over 1,200 properties available to local authorities to meet demand for social housing in Dublin.
In terms of NAMA’s contribution to existing and potential future supply, the Agency’s limited exposure to residential property in Ireland should be noted. NAMA debtors and receivers control less than 1% of the national residential stock. In Dublin, houses under NAMA control constitute only 0.3% of the Dublin housing stock; in the case of apartments, NAMA debtors and receivers control less than 5% of the Dublin apartment market. Therefore, while NAMA will contribute as much as it can to resolve supply shortages, other sources of funding and supply will be needed to meet projected housing demand over the medium-term in Dublin and this Government is engaging extensively with the wider banking and property sectors in this regard.
56. Deputy Michael McGrath asked the Minister for Finance the total value of artwork disposed of by the National Asset Management Agency to date; and if he will make a statement on the matter. [48779/13]
View answerNAMA advises that the value of such sales is of the order of €2m to date.
57. Deputy Michael McGrath asked the Minister for Finance if he is concerned at the significant rise in the number of home repossession actions being taken by banks during the month of October; and if he will make a statement on the matter. [48780/13]
View answerThe strong view of the Government is that, in respect of co-operating borrowers under the Mortgage Arrears Resolution Process, repossession of a person’s primary home should only be considered as a last resort and that every effort should be made to agree a sustainable arrangement as an alternative to repossession. The policy measures adopted by Government are built on that overall objective.
The Central Bank’s Code of Conduct on Mortgage Arrears (CCMA) places an onus on the banks, in respect of a co-operating borrower, to explore all the options for an alternative repayment arrangement offered by the lender to address a mortgage difficulty before any legal action is considered. Furthermore, under the Mortgage Arrears Resolution Targets (MART) process, the Central Bank is now requiring the main lenders to work through their mortgages in arrears of more than 90 days and, where possible, to propose and conclude sustainable restructures with their borrowers in arrears. As the Deputy will be aware, the Governor of the Central Bank has stated that any bank proceeding to legal recourse with co-operating borrowers, or where alternative sustainable arrangements were available, is not acting in a manner consistent with the MART process, or with the CCMA.
The initial results of the Central Bank’s audit of the banks’ end of June target will be available shortly. This will provide an independent assessment on the compliance by the banks with all the MART requirements.
Of course, the CCMA and MART can only work in circumstances where the borrower cooperates with the lender and engages with the process. Where this does not happen, the lender may have no other option but to go down the legal route to deal with an arrears case. However, if that course of action leads the borrower to commence a constructive engagement, this can lead to a more favourable outcome for the respective parties.
The Deputy will be aware that there are also now new insolvency resolution options available to a borrower under the Personal Insolvency Act. The Courts now have the power to adjourn legal proceedings in respect of a primary home to see if a Personal Insolvency Arrangement can be explored and agreed as an alternative to repossession.
Regretfully, however it must be accepted that due to the individual circumstances, not all mortgages can be made sustainable. There will sometimes be circumstances where the person will have to lose ownership of the home. Indeed, in such cases this may be in the best overall long term interests of all parties. The Central Bank has stated that it does not expect that repossession will be the lender’s preferred solution to mortgage difficulties and in most cases engagement by the borrower will make the legal option unnecessary. However in circumstances where the borrower does not engage with a lender to address a mortgage difficulty and, subject to fully complying with the Code of Conduct on Mortgage Arrears, there may be no other option for the lender but to commence legal proceedings.
