IBRC Liquidation

Dáil Éireann Debate, Wednesday - 16 July 2014

Wednesday, 16 July 2014

Questions (53, 54)

Stephen Donnelly

Question:

53. Deputy Stephen S. Donnelly asked the Minister for Finance further to the statement in Dáil Éireann on 7 February 2013 if, by agreement with the European Central Bank, the liquidation of IBRC has caused the Central Bank of Ireland to take ownership of the €3.4 billion bond used to settle the promissory note last March; whether he can confirm the price at which the ECB acquired the bond from Bank of Ireland; and if he will make a statement on the matter. [31774/14]

Stephen Donnelly

Question:

54. Deputy Stephen S. Donnelly asked the Minister for Finance further to the statement in Dáil Éireann on 7 February 2013 if, by agreement with the European Central Bank, the liquidation of the Irish Bank Resolution Corporation has caused the Central Bank of Ireland to take ownership of the €3.4 billion bond used to settle the promissory note last March; if he will outline the agreement referred to between the State and the European Central Bank; when it was entered into; the rights and obligations of both the State and the ECB; and if he will make a statement on the matter. [31775/14]

Written answers

Minister for Finance

I propose to take Questions Nos. 53 and 54 together.

Following the termination of IBRC's market report of the 5.4% Irish 2025 bond in the context of the special liquidation of IBRC, this particular bond was acquired by the Central Bank of Ireland.  The purchase was carried out on the secondary market between the Central Bank and Bank of Ireland. The Bank has indicated that it intends to sell the bonds acquired as a result of the liquidation of IBRC as soon as possible, provided conditions of financial stability permit.  The Cental Bank has undertaken that minimum of bonds will be sold in accordance with the following schedule:  €0.5bn by the end of 2014, €0.5bn per annum from 2015 to 2018, €1bn per annum from 2019 to 2023 and €2bn per annum from 2024 onwards.   Further information on the transaction can be found in the Central Bank of Ireland Annual Report (http://www.centralbank.ie/publications/Documents/Central%20Bank%20of%20Ireland%20Annual%20Report%202013.pdf).

Other details in relation to the acquisition of the 2025 Irish government bond by the Central Bank of Ireland are matters for the Central Bank of Ireland.