Dáil Éireann Debate, Wednesday - 12 January 2011
89 Deputy Michael D. Higgins asked the Minister for Finance his views on the future viability of Irish Life and Permanent; if he expects that the State will be required to make a capital injection into the bank during 2011 in view of the revised PCAR analysis and enhanced capital requirements; if he remains committed to the future existence of a third force in Irish banking; and if he will make a statement on the matter. [1399/11]
Amharc ar fhreagraAs the Deputy is aware, the Government has devoted considerable effort, over the last two years, to ensuring the future viability of Irish banks. Furthermore, the Deputy will also be aware that, in November 2010, the Central Bank of Ireland set new enhanced minimum capital requirements for Allied Irish Banks, Bank of Ireland, EBS and Irish Life and Permanent (ILP) at 10.5% Core Tier 1. Additionally, the Central Bank also stipulated that the banks are required to raise sufficient capital to achieve a capital ratio of at least 12% Core Tier 1 by specified dates. For ILP this means that they have to raise additional eligible capital of €243 million by 31 May 2011. ILP have formally confirmed that it intends to meet the additional required amount involved from its own resources.
The Central Bank has also announced that it will subject the Irish banks to a stress test under its Prudential Capital Assessment Review methodology and a Prudential Liquidity Assessment Review by end March 2011.
The Deputy will also be aware that ILP is one of two bidders remaining in the prospective sale of EBS. It would be wholly inappropriate and premature for me to speculate publicly on the possible outcome of this process.
I have indicated previously that I wish to see a strong vibrant competitive banking system in place to meet the needs of the economy and its citizens. I am disposed to considering, in this light, any proposals, consistent with EU State aid rules, which will achieve this objective whether that involves domestic or international participants or a combination of both.
