The Prudential Liquidity Assessment Review (PLAR) process is ongoing and proceeding according to schedule. The Deputy will be aware that within the EU/IMF Programme of Financial Assistance to Ireland, the Central Bank will complete the PLAR for 2011 by the end of March 2011. The PLAR process will look at the measures to be implemented with a view to steadily deleveraging the banking system and reduce the bank's reliance on short term funding by the end of the programme period. The setting of loan to deposit ratios is deferred on the initiative of the external authorities and targets will be informed by the Central Bank's ongoing PLAR work.
The target loan-to-deposit ratios, once agreed, are designed to ensure that convergence to Basel III standards can be readily met by the relevant dates. To this end, the PLAR will establish target funding ratios for each of the banks, identify non-core assets and set an adjustment path to these targets based on specified non public annual benchmarks. The design and implementation of the PLAR will be agreed with the European Commission, the ECB and the IMF. Compliance with the PLAR benchmarks will be monitored and enforced by the Central Bank taking account of prevailing market conditions. The PLAR will also be updated on an annual basis.