Dáil Éireann Debate, Wednesday - 13 May 2015
71. Deputy Lucinda Creighton asked the Minister for Finance if he or his Department were ever informed of, or made aware of, any allegations concerning write-downs being provided on debt for personal borrowings in the Irish Bank Resolution Corporation; if he will provide the nature of these allegations, if they occurred, and the subsequent action that was taken by him or his Department; and if he will make a statement on the matter. [18780/15]
View answer72. Deputy Lucinda Creighton asked the Minister for Finance further to Parliamentary Question No. 69 of 30 April 2015, if he will ensure that as part of the directions issued to the Special Liquidator to perform a review and produce a report concerning activities and management decisions, this will include a review into any write-downs on debt for personal borrowings; if he will confirm that, irrespective of the impact on ultimate returns to the taxpayer, any decision which resulted in a borrower receiving a write-down on personal borrowings will also be reviewed; if he accepts that all write-downs on personal borrowings by the Irish Bank Resolution Corporation would give rise to public concern; and if he will make a statement on the matter. [18782/15]
View answerI propose to take Questions Nos. 71 and 72 together.
The relationship framework in place between IBRC and the Minister for Finance recognised the separation of the Minister and the bank and limited the Minister's intervention in the conduct of bank business to that necessary to protect the public interest.
The bank Board retained full responsibility and authority for all of the operations and business of the bank in accordance with its legal and fiduciary duties and retained the responsibility and authority for ensuring compliance with the regulatory and legal obligations of the bank. The bank also remained licensed and regulated by the Central Bank and was obligated to operate at all times in compliance with Regulatory Requirements, including any codes of conduct put in place by the Central Bank.
Taking into account this existing oversight, and while the Board retained responsibility for day to day operations, the relationship framework was put in place to which set out the instances in which the Bank were required to consult with the Minister for Finance on certain issues outside the ordinary course of business.
Any arrangement entered into between IBRC and an individual borrower, including the write down of debt, which did not trigger mandatory consultation with the Minister for Finance under the relationship framework remained a matter for the Board of the bank at that time. It was the fiduciary responsibility of the Board to ensure that all matters in IBRC were managed in the best way possible to achieve the best result for the State.
This being the case, if the attention of my officials or myself was drawn to the specifics of an individual case outside of the scope of the relationship framework, it would have been made clear that this was a commercial matter for the bank. Of course if I or my officials became concerned around any such issues we would have explored any such issues further with management.
The scope of the transaction review which I have directed the Special Liquidators to undertake will cover transactions that resulted in a capital loss to IBRC of at least €10 million during the period between 21st January 2009, the date of the nationalisation of IBRC, and 7th February 2013, the date of the appointment of the Special Liquidators to IBRC; or are specifically identified by the Special Liquidator as likely to give rise to potential public concern, in respect of the ultimate returns to the taxpayer. Given this, any personal borrowings which resulted in a capital loss to IBRC of least €10 million during the specified period will be reviewed.
If the Deputy happens to be in possession of any evidence of improper behaviour, I would encourage her to take such information to the appropriate authorities.
The following information was provided under Standing Order 40A
Please find a revised reply below. As per the original reply provided, this reply will also incorporate Parliamentary Question No. 72. Please note, given that certain parts of the original reply are no longer applicable following the establishment of the Commission of Investigation into certain decisions, transactions and activities entered into by IBRC, I have provided the revised answer as of today's date [26 June 2015].
Revised reply to Parliamentary Question No. 71 and Parliamentary Question No. 72
I propose to take Parliamentary Question No. 71 and Parliamentary Question No. 72 together.
The relationship framework in place between IBRC and the Minister for Finance recognised the separation of the Minister and the bank and limited the Minister's intervention in the conduct of bank business to that necessary to protect the public interest.
The bank Board retained full responsibility and authority for all of the operations and business of the bank in accordance with its legal and fiduciary duties and retained the responsibility and authority for ensuring compliance with the regulatory and legal obligations of the bank. The bank also remained licensed and regulated by the Central Bank and was obligated to operate at all times in compliance with Regulatory Requirements, including any codes of conduct put in place by the Central Bank.
Taking into account this existing oversight, and while the Board retained responsibility for day to day operations, the relationship framework was put in place which set out the instances in which the bank were required to consult with the Minister for Finance on certain issues outside the ordinary course of business.
