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Banks Recapitalisation

Dáil Éireann Debate, Wednesday - 23 May 2012

Wednesday, 23 May 2012

Ceisteanna (48, 49)

Peadar Tóibín

Ceist:

48 Deputy Peadar Tóibín asked the Minister for Finance if he will provide an update on the operations of the Irish Bank Resolution Corporation; the timeline for the IBRC to be wound down; and if he will confirm that the IBRC is not taking on further roles including the transfer of tracker mortgages from other banks. [25637/12]

Amharc ar fhreagra

Freagraí scríofa

As the Deputy is aware the bank reports its progress twice a year in the public domain by way of its Interim and Annual Report and Accounts. The most recent Annual Report and Accounts for 2011 were released at the end of March 2012. This provides the most up to date information on the operations of IBRC and a copy of this is available on the Bank's website or through its Corporate Affairs function. The bank continues to work towards wind down by 2020 as agreed in the EC Restructuring and work out Plan for Anglo Irish Bank Corporation Limited and Irish Nationwide Building Society. The bank is currently ahead of target in the work out plan. The Deputy is also aware the Government is committed to reviewing the arrangements that were put in place to capitalise IBRC. The purpose of this review is to determine if there is a way to reduce the overall cost to the State. Part of the capitalisation of IBRC was provided using promissory notes as consideration. The Troika has agreed to engage in this process to produce a common paper which will consider all options for restructuring the notes in terms of the source of funding, the duration of the notes, the interest rate etc.

In addition to the possible re-engineering of the promissory notes, as part of the technical discussions we are looking at potential improvements for the banking sector. However, it is too early to make any assessment as to what if any improvements/solutions might arise from these discussions.

Michael Colreavy

Ceist:

49 Deputy Michael Colreavy asked the Minister for Finance if he will provide an update on the joint technical paper on the promissory note; and if the paper is completed and when same will be published. [25644/12]

Amharc ar fhreagra

As the Deputy is aware the Government is committed to reviewing the arrangements that were put in place to capitalise IBRC. The purpose of this review is to determine if there is a way to reduce the overall cost to the State. Part of the capitalisation of IBRC was provided using promissory notes as consideration. The Troika has agreed to engage in this process to produce a common paper which will consider all options for restructuring the notes in terms of the source of funding, the duration of the notes, the interest rate etc. While the development in relation to the end March Promissory Note payment is a positive development we must keep our eye on the greater benefits which would derive from the re-engineering of the promissory note and also the potential improvements for the banking sector which could also stem from the ongoing technical discussions. Further it should be borne in mind that recent concerns in the Eurozone underpin the fact our problems are part of a wider European dilemma and to the need for solutions to address the Irish situation as part of an overall Eurozone/global solution.

It is for these reasons that we must look at the recent developments in relation to the Promissory Note repayment as an initial step to facilitate a project where, if we are successful, it will be in the medium term rather than immediately. These discussions will continue and the Government is focused on developing an alternative solution to the promissory note arrangement in IBRC. The ongoing discussions may also explore options to refinance the long term Government bond issued in settlement of the March 31 payment. We all want to arrive at a successful conclusion that is in the interests of Ireland and the EU. A decision in relation to the publication of the technical paper will be made once the paper is completed and subject to normal commercial sensitivities.

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