Vol. 501 No. 2
40 Mr. Ferris asked the Minister for Finance the proposals, if any, he has received in relation to the possible future role of the National Treasury Management Agency; his views on these proposals; and if he will make a statement on the matter. [5458/99]
46 Mr. J. Bruton asked the Minister for Finance if he will make a statement on the future of the National Treasury Management Agency; the functions to be undertaken by this body in view of the introduction of the euro; and if new func tions are to be undertaken by the agency on behalf of the Government. [1083/99]
I propose to take Questions Nos. 40 and 46 together.
The National Treasury Management Agency was established under the National Treasury Management Agency Act, 1990, to borrow money for the Exchequer and to manage the national debt. No change in this role is envisaged.
As regards the possible impact of the introduction of the euro on the functions of the agency, the national debt is now overwhelmingly in domestic currency, the euro being the currency of the State and the Irish pound unit being a subdivision of it. In consequence, the foreign exchange risk aspect of the agency's business has reduced considerably. However, important areas of risk remain to be managed even with the advent of the single currency – including liquidity risk, interest rate risk, operations risk and credit risk – and they will continue to be handled by the NTMA. In addition, in the new environment of EMU, the agency now has to compete with other sovereign borrowers issuing bonds denominated in the same currency – the euro. This presents the agency with a significant marketing challenge. It is a challenge which I am confident will be successfully met.
I have also been considering proposals which would entail assignment to the NTMA of new functions in areas where the agency's experience and expertise can be used to good effect. For example, following the assignment to the agency last year of responsibility for the management of part of FEOGA-related debt, it is proposed that management of the remaining FEOGA debt will be transferred to the agency in the near future. I am also considering proposals for the involvement of the agency in a number of other areas, including the handling of certain compensation claims against the State, and for the provision of a central treasury service whereby the agency would be able to offer certain cash management facilities to local authorities, health boards, VEC's and other Exchequer funded bodies.
