Dáil Éireann Debate, Wednesday - 20 July 2011
93 Deputy Thomas P. Broughan asked the Minister for Finance his views on whether major write-downs plus equity for bondholders are crucial elements of the recapitalisation and restoration of Irish banks; and if he will make a statement on the matter. [21723/11]
Amharc ar fhreagraThe Deputy will be aware of my Statement on Banking of 31 March 2011 where I set out Government policy in relation to the matters the Deputy has raised. As part of the PCAR 2011 results further recapitalisation measures are required to enable AIB/EBS, Bank of Ireland and IL&P to meet their regulatory capital requirements set by the Central Bank. The State has committed to completing the recapitalisations to the extent possible by 31 July as part of the Programme of Financial Support for Ireland and there are no plans to change to an alternative recapitalisation strategy.
The Government has, however, instigated processes which have reduced and will further reduce the cost to the State by looking for significant contributions from subordinated debt holders, by the sale of assets to generate capital and, where possible, by seeking private sector investors. It is expected that the effect of these actions will be to reduce the amount of capital required by the State very significantly. In particular, a number of the financial institutions have recently engaged in liability management exercises in relation to subordinated debt which have resulted in the generation of some €4.4bn in Core Tier 1 Capital, reducing accordingly the amount required to be contributed by the State to the €24bn PCAR capital requirement.
