The Deputy who tabled Question No. 6 is not present.
Other Questions
Question No. 6 replied to with Written Answers.
NAMA Bonds
Ruth Coppinger
Ceist:7. Deputy Ruth Coppinger asked the Minister for Finance the projected value of National Asset Management Agency bonds to be redeemed for each year from 2015 to 2018, broken down by bank. [17575/15]
My question relates to the value of NAMA bonds to be redeemed for each year from 2015 to 2018, broken down on a bank-by-bank basis, and the cost of NAMA to the State.
The NAMA chief executive stated in his opening address to the Committee of Public Accounts on 18 December 2014 that NAMA is aiming to redeem a cumulative 80%, or €24 billion, of its senior debt by the end of 2016 and hopes to have redeemed all of it by the end of 2018. He stated that these targets were predicated on conditions in the Irish market remaining favourable and on NAMA being in a position to retain sufficient specialist staff to enable it to generate the optimal financial return from the realisation of its residual loan portfolio. I am advised by NAMA that any redemption of senior bonds is pro rata by reference to the amounts held by each institution. The current breakdown of outstanding NAMA senior bonds by holding institution is set out in the following table. Of the total of €12,590,000 of senior notes outstanding, AIB holds €8.78 million, or 69.7%, of the total; Bank of Ireland holds €2.213 million, 17.6%, of the total; Permanent TSB holds €1.202 million, or 9.5%, of the total; and the Central Bank of Ireland holds €395,000, or 3.1%, of the total.
|
NAMA Senior Notes |
Par Amount Outstanding( € millions) |
% of Total Outstanding |
|
AIB |
8,780 |
69.7% |
|
Bank of Ireland |
2,213 |
17.6% |
|
Permanent-TSB |
1,202 |
9.5% |
|
Central Bank of Ireland |
395 |
3.1% |
|
Total |
12,590 |
100% |
The entire matter of NAMA needs to be reviewed. Beginning in March 2010, NAMA purchased loans from five banks for par value or the total borrower debt owed on them in October 2009, which amounted to €74.4 billion. It paid for the loans with NAMA bonds carrying a face value of €31.8 billion. As the bonds were guaranteed by the then Minister for Finance, they are effectively Government debts. However, to avoid NAMA debt appearing on the Government balance sheet, NAMA was set up as a special purpose vehicle which allowed it to remain off the balance sheet under EUROSTAT rules. Like the establishment of Irish Water, it is an accounting trick because the State is effectively on the hook for the debt. NAMA should really be counted as part of the national debt.
A breakdown of the par value of the loans for each bank reveals a significant discrepancy with what NAMA paid for them. NAMA was originally intended to turn a profit of €1 billion but one could argue that it has cost the taxpayer €40 billion.
Generally speaking what the Deputy outlined is correct but while the nominal value was €74 billion, the purchase price of €31 billion was paid with bonds. As NAMA sells its loan books, it can repay the bonds. It has committed to repaying 80% by 2016. It is in a position to pay back all of its senior bonds and junior debt and still be in surplus. NAMA is not going to cost the State anything. Indeed, the latest predictions indicate that NAMA will have a surplus, which means in simple terms that it will turn a profit, at the conclusion of its transactions. The burden will not fall on the shoulders of the taxpayers because the sale of the loan books is paying off the aforementioned €31 billion. It is making good progress in this regard.
NAMA is fully accountable. I do not think the House generally knows that the Comptroller and Auditor General has responsibility for auditing NAMA and that five or six staff from that office are permanently assigned to examining all transactions in NAMA.
The hope is that NAMA will make money but when NAMA refers to making a profit, it means that it hopes to recoup more than €31.8 billion from the NAMA bonds it gave the banks for the loans, as well as interest on the bonds and its running costs. However, this ignores the loss of €39.6 billion that the State incurred through the State owned banks because of the 57% haircut crystalised on loans as a result of the establishment of NAMA. When NAMA states that it is making a profit, it is disregarding the loss to the State of nearly €40 billion entailed in setting it up. It is hoped that money will be recouped through the sale of AIB but that is based on an underestimate on the true cost of bailing out AIB and Bank of Ireland. If AIB is privatised and sold off, it is likely that the State will not get much back because that is how these things usually go.
The figure the Government cites for AIB is usually €20.7 billion but the true figure is closer to €30 billion. Similarly, with Bank of Ireland, the Government usually cites €4.7 billion, but the true cost is over €7.6 billion. What is the Minister's view on that?
On the write-downs between the nominal value of the loans of around €74 billion and the €31 billion to which the Deputy referred, those losses were taken by the creditors who had borrowed from the banks. The losses are not to the taxpayer but to the individual creditors who effectively went broke. There are several examples of this, the most prominent of which are in the building and development industry. There are many others in ordinary businesses across the country which went broke during the crisis and there was a write-down of their loans.
Tax Yield
Richard Boyd Barrett
Ceist:8. Deputy Richard Boyd Barrett asked the Minister for Finance if he will provide the figures on the revenue garnered each year, since their introduction of the household tax, the local property tax, the universal social charge and the pension levy, providing figures and totals for each year; the overall total since their establishment; and if he will make a statement on the matter. [17568/15]
The Government is doing its level best to trumpet and spin a supposed give-back to workers in the coming budget. My question seeks to put any so-called give-back in the context of how much workers and ordinary citizens have actually lost since 2008 on the various austerity taxes and charges, be it the local property tax, LPT, the universal social charge, USC, the pension levy or the household tax. What are the annual and total figures for all of these austerity charges and taxes?
I am advised by the Revenue Commissioners that information on receipts by tax head is available on the Revenue Commissioners' statistics website at http://www.revenue.ie/en/about/statistics/index.html, under "Revenue Net Receipts by Taxhead on an annual basis" to 2014. As shown on the website, local property tax net receipts were €316 million in 2013 and €493 million in 2014. The Revenue Commissioners have also confirmed that since they took over responsibility for collection of the household charge collection from July 2013, around €2 million was paid in 2013 and €37 million in 2014. These payments are included in the local property tax net receipts figures noted above.
Receipts figures for USC were €3,114 million in 2011, €3,790 million in 2012, €3,930 million in 2013 and €3,647 million in 2014. It should be noted that the 2014 PAYE and USC outturns were affected by adjustments made this year to reapportionment receipts between these two headings to correct an initial estimated allocation used for the period January to June 2013. The Revenue Commissioners have advised me that the 2013 P35s, received in early 2014, show lower USC payments and higher PAYE payments than were allocated in 2013. To off-set an automatic reallocation based on these P35 declarations, receipts are being taken out of USC collection throughout 2014. This means that PAYE in 2014 will benefit from a transfer of €407 million and USC will lose an equivalent amount. The net Exchequer effect of the reapportionment is and will remain neutral.
The receipts from the stamp duty levy on pension fund assets introduced in the Finance (No. 2) Act 2011 amounted to €463 million in 2011, €483 million in 2012, €535 million in 2013, and €743 million in 2014. Receipts for 2015 will be published in due course.
Since 2011, up to €13 billion has been raised through the USC, €2 billion through the pension levy and close to €1 billion through the property tax. This has been an enormous gouging of moneys from the pockets of workers over recent years. We were told the property tax would improve local services. The USC was to be a social charge, while we discovered that the pension levy was not a pension levy at all. Essentially, for all that was gouged out of people’s pockets, we got fewer services as well as cuts to remaining ones. What will the Minister do to make up for this fantastic gouging from the pockets of ordinary people over recent years?
The Deputy must be the only the person in the country who is expressing surprise at these figures this morning. Everyone knows we have lost almost a decade because of the policies pursued by the previous Government. We know the country was on the verge of bankruptcy. The banks actually became bankrupt and they had to be bailed out. We could not continue the way we were. If it were not for our colleagues in Europe, the whole country would actually have gone bankrupt. It was because of the money provided by Europe and the International Monetary Fund that the adjustment period could be spread over time to make it sustainable. It is somewhat amazing for the Deputy to express surprise this morning that these impositions were made historically, when they have been the bread and butter of political discourse for the past eight years. He never ceases to amaze me with what he comes up with.
What will I do to reverse them? As I announced and implemented in the last budget, we will not increase any taxes or cut expenditure further. We are slowly unwinding the more penal of the provisions. The pension levy, to which the Deputy pointed in his question, was finished last year, and it was announced that the small residual amount to be collected in 2015 would not be renewed in 2016. We started unwinding income tax and USC receipts last year and are committed to continuing that in the next budget.
The Minister is right that I and others have been raising these issues for the past several years. It is useful, however, to see what the totals are and how much has been taken from the pockets of people who had no responsibility for the economic crisis. What have they got back for it? Nothing. That puts into context what the Minister claims he will give back to them.
Another point I repeatedly make to the Minister, but one to which he never responds, is this. How is it that workers have lost €14 billion as a result of the austerity charges and taxes while, coincidentally, the super-rich in society have gained about the same amount of money? This is according to The Sunday Times rich list, as well as the wealth distribution figures produced by TASC, Credit Suisse and Social Justice Ireland. How is it that what has been taken from the pockets of the working people has managed to end up in the pockets of the super-rich?
First, we do not live in a society that is class-based or class-divided. This is a republic and we are all workers.
Give us a break. Are those who speculate on the Stock Exchange workers too? I do not think so.
I know there are some people who do not like to describe themselves as workers. However, to try and present a case that a cohort of people - workers - were the only ones who lost out during the past eight years is a fallacy. Everybody got hammered. The Deputy need only look at the live register.
No. The super-rich did not. Denis O’Brien did not.
Deputy Boyd Barrett, this is Question Time.
Look at all the small businesses that closed down.
What about the millionaires?
Deputy Boyd Barrett, will you allow the Minister to answer your question?
I wish he would answer the question.
Deputy Boyd Barrett is building a fictional model of society. He is also selling unsound political currency to the people. He is pretending that out there somewhere there is a mythical enormous group of millionaires hiding under the bushes, and if we only taxed them adequately, everybody else would have to pay no tax. That is the way the Deputy presents it, which is grand. It is the money-tree-in-the-garden school of economics. It is not reality, however.
Is The Sunday Times rich list a load of nonsense? Does Denis O’Brien not have all that money?
Economic Policy
Ruth Coppinger
Ceist:9. Deputy Ruth Coppinger asked the Minister for Finance if any cost-benefit analysis was carried out by his Department in relation to the decision to split tax cuts and public spending increases 50-50 in the next budget, as announced in the spring economic statement; and if he will make a statement on the matter. [17576/15]
Has a cost-benefit analysis been done by the Department of Finance regarding the Minister's decision to split tax cuts and public spending increases in a 50:50 ratio in the next budget, which is a change in the previous position of a 60:40 split? Has the Minister done an analysis of the impact this will have on our health and education sectors, on housing policy and on other significant public spending needs?
The spring economic statement, SES, outlines Ireland's medium-term economic and fiscal plan. It demonstrates that our public finances are under control, the economy is growing and continued improvement is forecast in the coming years. In this regard, the SES outlined that fiscal space of the order of €1.2 to €1.5 billion will be available for budget 2016, while still complying with our obligations under the Stability and Growth Pact. Indeed, one of the key purposes of the SES is to provide a basis for debate with relevant stakeholders in the national economic dialogue on how this fiscal space should be best used. The exact quantum available will depend on the composition of measures, changes in the estimated 2015 fiscal outturn, macroeconomic variables, etc.
In general, cost-benefit analyses are more appropriate to individual measures than to overall fiscal strategy. The 50-50 split reflects the strategy of Government to marry the objectives of encouraging economic growth while increasing the resources available to deliver quality public services. With regard to the taxation element, according to the OECD hierarchy of taxes, labour taxes are considered one of the most harmful to economic growth. Therefore, the Government has committed to reducing the tax burden for low and middle income earners as a means of encouraging labour market participation and subsequently economic growth. Given the expenditure reductions over recent years, certain sectors require expenditure increases to accommodate demographic and other demand pressures. For example, given the increase in the number of children of school-going age, the need for additional teachers has become evident. It should be noted that expenditure on education will facilitate a more productive workforce over the longer term which will improve Ireland's potential growth rate.
Similarly, Ireland's investment in capital is operating at a level only just below depreciation. Further investment in capital stock will add to Ireland's growth potential. Budget 2016 will incorporate elements of the capital review to be published this summer and will prioritise projects and deliver value for money. Ultimately, the Government will use the available fiscal space to strike a balance between encouraging economic growth and ensuring that our public services are improving and fit for purpose. The exact measures to be contained in budget 2016 will reflect these objectives.
The spring economic statement is a continuation of the flawed policy of diminishing public expenditure and the public sector and shifting wealth away from workers. How will the Government get more teachers, nurses and so on by cutting public spending? I am in favour of a restoration of public spending, but I am also in favour of taxing the wealthy. In the previous answer, the Minister made reference to the fact that there is no wealth there to tax. The Denis O'Briens, the top 1%, have seen their wealth increase dramatically in the last few years. Regarding the impact this will have, the Government is proposing to cut taxes by €650 million to €750 million in the hope of winning the general election. However, it is likely that this would be through tax relief rather than through getting rid of the universal social charge-----
Could we have the question please?
-----and other taxes on workers. Can the Minister clarify that? Is it not more likely that it will benefit the wealthy in society, just as the last budget did, rather than low-paid workers, many of whom are outside the tax net? We have record numbers of low paid workers in Ireland.
The Deputy raises a number of questions. First, she talked about how we were continuing to cut public expenditure. We are not. In the last budget, the Government increased public expenditure. The spring statement states that we will continue to increase public expenditure between now and 2020. We have spelled it out in precise terms for 2016. The Minister for Public Expenditure and Reform, Deputy Howlin, will spend another €750 million on top of what he spent in 2015 on enhancing public services. From 2016 to 2020, the figures provided in the spring statement have built in the extra expenditure, which runs from demographic changes. In other words, the extra teachers, nursing home beds and so on that will be needed because of demographic changes are built into the figures. On top of that, we think we will have space slightly in advance of the precise space identified for the 2016 budget in 2017, 2018, 2019 and 2020. There is no suggestion that we will do anything other than target the incomes of low-paid and middle income people to give them extra relief. There are three personal taxes: USC, income tax and PRSI. Different reliefs affect different cohorts of people. As the Taoiseach announced in this House, we intend to reduce the burden of the universal social charge on taxpayers.
With inflation, the increase in spending on public services that the Minister mentioned will actually amount to a decrease of 1% in real terms, according to the estimate of economists. Ireland would have to increase public investment by €2 billion to come up to the EU average. With regard to wealth, 10% of the top earners own 30% of the wealth in this country, while 1% owns 20%. There is, therefore, a massive discrepancy in wealth in this country. From 2006 to 2013, which includes some time under the Minister's watch, taxes on capital have plummeted. There is a conscious policy not to tax those who have wealth and those who control wealth. For example, a 10% increase on the top 10% of earners could bring in €2.6 billion. A 1% increase in corporation tax-----
Could the Deputy put her question?
Should the Minister not be considering that, given that Ireland is now known to be a tax haven? Will we ever see any sort of housing policy-----
There are other Deputies waiting. Please finish up.
-----with the fact that we are going to see a 1% decrease in public spending?
The statistical tables accompanying the spring statement are quite complex and I need guidance through them myself. However, it is not true to say that they indicate a reduction in expenditure. From 2017, 2018, 2019 and 2020-----
In real terms.
The tables for 2017, 2018, 2019 and 2020 are carried forward on the basis of no policy change. That is where one gets the reduction. If there are no policy changes, there will be reductions, but there will be policy changes. The Government has committed to making policy changes and to using the fiscal space that has been identified for each year for extra expenditure to enhance the public services that have been damaged during the recession and to provide extra capital expenditure. The Minister for Public Expenditure and Reform, Deputy Howlin, will announce a public capital programme before the summer. That will also show this. The other issues the Deputy raised are political debating points with which I disagree, but she is quite free to hold those opinions.
Living City Initiative
Seán Fleming
Ceist:10. Deputy Sean Fleming asked the Minister for Finance the actions he is taking to ensure that the living city initiative is brought into force; and if he will make a statement on the matter. [17542/15]
What impact has the living city initiative the Minister announced over three years ago had to date and when will it be fully brought into force, so that we see some results from this?
The living city initiative was commenced and launched on 5 May 2015. It is an urban regeneration incentive which focuses on the regeneration of the historic centres of six cities. This initiative is a scheme of property tax reliefs which applies in certain "special regeneration areas" in the centres of Dublin, Cork, Limerick, Galway, Waterford and Kilkenny, particularly those areas which are most in need of regeneration. This is not a widespread initiative, as it is targeted at those areas which are most in need of attention. The aim of the living city incentive is to bring life back into the heart of the relevant cities by offering tax relief for qualifying expenditure incurred on the refurbishment or conversion of certain buildings where conditions are met. Planning for the scheme has included a thorough ex ante cost-benefit analysis, and recommendations from relevant agencies.
The residential element of the living city initiative provides for an income tax deduction for qualifying expenditure incurred on the refurbishment or conversion of a building for use as a dwelling, over a ten-year period.
The building must have been constructed before 1915 and must be located in a special regeneration area of the city in question.
The commercial element of the living city initiative provides for capital allowances over a seven-year period in respect of qualifying expenditure incurred on the refurbishment or conversion of a property located in a special regeneration area for use for the purpose of retailing goods or the provision of services within the State. The amount of tax relief available under the commercial element of the incentive is effectively capped at €200,000 for any individual project.
Information on the scheme is available on the websites of the relevant councils, and also on the Department of Finance's website at http://www.finance.gov.ie/living-city-initiative. A document containing frequently asked questions was published by the Revenue Commissioners. Maps of the special regeneration areas are available on that website and also on the websites of the relevant local authorities.
I thank the Minister. First, am I correct in saying the original plan was for the initiative to commence in Limerick and Waterford? What has been the take-up in those areas? In a way, they were a sample of what the scheme would generate in time to come.
Second, we have often had schemes like this in the past and sometimes they did not really take off. My main concern in those four cities is to ensure there is a dedicated person who understands the system in the relevant local authority. It is all well and good to refer to the website, but what will happen is that when one rings the finance department in a council, on the basis that it is a finance matter, the finance department will say it is a planning matter, the planning people will say it is a zoning matter and so on. The caller will have to go through many rigours, and will then be told he or she requires advance approval from the Revenue Commissioners. Is there a single one-stop shop? The website is fine, but I have previously found that although such schemes are devised by the Department, nobody takes personal ownership of them at director of services level - as these issues can cross different directorships - and sometimes they fail on that basis. Why did it take until Tuesday to publish the information?
Schemes along these lines must be cleared in Brussels at Commission level. When the initial proposal was put to the authorities in Brussels, certain difficulties emerged, so there was a rethink and the scheme was extended to the six main cities. The local authorities were charged with designating the areas they considered suitable. An independent outside consultant was retained to give independent adjudication on whether the areas being included were appropriate. All that has been resolved now, and the six local authorities have designated their areas. The Revenue Commissioners have the arrangements in place for the tax relief. It is now up to the private sector to see whether there will be an uptake.
It is very difficult to know, when one conceives of such schemes, whether there will be an uptake. Much depends on the amount of credit in the community and the level of the incentives. In this case the incentives are of two kinds. If, for example, somebody purchases a pre-1915 house in Waterford and pays €100,000 for it, if the person then puts another €100,000 into the refurbishment, he or she can write off €10,000 a year for ten years against income tax. Previously, the write-offs were not against income tax, and the persons concerned had to be owner-occupiers. That will suit some people. For the commercial sector, there are capital allowances for seven years, with a cap of €200,000. It is possible to combine the two. One could refurbish a shop with an apartment overhead that is owner-occupied and avail of the double relief. I hope it works. The scheme is generous. It is in the hands of the local authorities now to drive it, but I understand they are very interested.
The Minister will have detected that there is no objection in principle from my side of the House on this issue. If anything helps to refurbish town centres and city centres, it must be good, because we see the way all development is spreading to the suburbs. It must be good to bring back life into city and town centre areas.
Will the Minister make available the cost-benefit analysis that was done? The Comptroller and Auditor General always looks at such schemes, and the cost versus the benefit will be examined. The Minister indicated that an independent person helped with the designations. Did the designations have to be approved by the elected members, or was it strictly an executive function? Did the Minister for the Environment, Community and Local Government or anyone else approve the areas for designation? Normally, such matters relating to town centres are planning issues, which are pertinent to the Department. I presume all the maps are on the website. When did the Minister sign the designations?
I understand there were delays with the approval of the scheme in Brussels. What are the key differences between what we have now and what the Minister originally hoped to introduce when he first announced the scheme?
The major difference is that it extends between the two cities originally involved in the pilot studies. In general terms, there was consultation between the Department of Finance, the Department of the Environment, Community and Local Government and the local authorities. The tendency of the local authorities is to designate the biggest area possible, but of course that does not always make commercial sense, because if one spreads the benefits too wide one may not get an uptake. There will be an uptake if the area is concentrated. The areas have been agreed by all sides and I signed the orders this week.
What about publication of the cost-benefit analysis?
We must move on to Question No. 11.
I will see. It may be published already. I am not sure what the position is. There is nothing secret about it. We will publish what we can publish.
Tax Code
Paul Murphy
Ceist:11. Deputy Paul Murphy asked the Minister for Finance the total estimated cost to the Exchequer of granting the banks the ability to offset corporation tax on previous losses; the amount each bank is expected to gain from this measure; if consultations were held or if communication was exchanged between his Department and senior management in the banks regarding the decision to allow banks to offset losses against corporation tax; and if he will make a statement on the matter. [17578/15]
We have only a minute left. If Deputy Paul Murphy forgoes his introduction, there will be time for the reply and possibly a short supplementary question.
Yes.
The Deputy may be aware that section 396C of the NAMA Act 2009 was a provision which limited the amount of trading losses incurred by a NAMA-participating bank that could be set off against future trading profits. The offset was limited to 50% of the profit of the year. It did not disallow any tax losses from being utilised but instead lengthened the period over which they could be used. It is important to highlight that the provision to allow the carry-forward of tax losses for setting off against future trading profits is available not only for banks but for all Irish corporates. Accordingly, the removal of section 396C put the covered banks in the same position as other corporates, including other banks operating in Ireland, so it was a levelling of the playing field.
Section 396C was introduced as a form of clawback for the taxpayer. It was put in place at a time, however, when State involvement in the sector was far more limited and, critically, before equity stakes were acquired in AIB and Bank of Ireland.
In the lead-up to the introduction of the new capital rules on 1 January 2014 under CRD IV, and at a time when the State owned 99.8% of AIB and 14% of Band of Ireland, section 396C no longer served its original purpose and indeed worked against the taxpayer. Accordingly, in the Finance Act 2014, I decided it was appropriate to remove this provision. The factors informing this decision were as follows: it improved the capital ratios under the new standards that were being introduced at the time under CRD IV; it reduced the risk to the State in its role of backstop provider of capital; and it improved the existing value of the State's equity and debt investments in the banks. The net effect of the removal of section 396C in terms of tax receipts for the Exchequer is largely one of timing. Ultimately, it will not have an impact on the State's total corporation tax take over the long term.
As per their respective annual reports for 2014, the deferred tax assets relating to Irish tax losses were:
|
Bank |
Amount |
|
AIB |
€3.2 billion |
|
Bank of Ireland |
€1.2 billion |
|
PTSB |
€0.4 billion |
Finally, I can confirm for the Deputy that at the time of analysing the impact of the removal of section 396C, officials in my Department requested the banks to provide an estimate of the impact of such a move based on their respective financial projections, to assist this analysis.
Does the Minister not consider it a bit obscene that the banks were bailed out to the tune of €64 billion, and they now get to count that bailout - those losses - as an asset on their balance sheets? Obviously, in the case of the nationalised bank it does not really matter, but from the point of view of Bank of Ireland, which has €1.2 billion in deferred tax assets, and the benefit to which on a yearly basis was doubled in the previous budget, it is not of benefit to the taxpayer but it is clearly of benefit to the banks. Did the banks unilaterally lobby for the change to take place before the Department contacted them? Is it the case that they are allergic to paying corporation tax and the Minister seeks to facilitate them?
A factor in the decision to remove section 396C was that it improved the capital ratios under the new capital standards that were being introduced at the time under CRD IV. The rules under CRD IV, which came into effect on 1 January 2014 on a ten-year phased basis, meant that deferred tax assets in respect of trading losses would no longer be considered as tier 1 capital.
The repeal of section 396C shortens the timeframe over which the deferred tax assets are used. The deduction from capital required under the new rules is, therefore, less important. For example, following the repeal of section 396C, when forecasting bank capital ratios a few years out, they are higher than they would otherwise be.
Second, it reduced the risk to the State in its role of backstop provider of capital. Aside from an increase in the bank's capital ratios under the new rules, the change also improves the quality of bank capital, thereby putting the institutions in a stronger position when being assessed by regulators and investors. This reduces the risk of a future requirement for State support.
Third, it improved the existing value of the State's equity and debt investment in the banks. Most investors value banks off the new, more stringent capital rules or what is referred to as a fully loaded basis, in other words, capital when calculated when all the new CRD IV rules are taken on board. It stands to reason that the improvement in the capital levels of the banks following the removal of section 396C has a positive impact also on valuation of the State's investments.
Written Answers follow Adjournment.