The IMF did not recommend nationalisation of the Irish banks. It did suggest that there can be circumstances in which a nationalisation is necessary. In this regard, the Deputy is aware of the nationalisation of Anglo Irish Bank, where circumstances were such that the Government believed a nationalisation was required.
The Government does not accept that nationalisation of the whole of the Irish banking system will be the short term panacea that some — but not the IMF — suggest. We believe that it is important, where possible, that the banking sector has a market presence and that it operates within market disciplines and constraints. A commercially focused banking system operating within market disciplines and constraints is best equipped to achieve the Government's aim of ensuring that the lending needs of the real economy are met.
I should note that the IMF Directors commended the response of the Irish authorities, welcomed the actions taken so far to safeguard financial stability and supported the NAMA initiative.
