As the Deputy will be aware, a key component of the Financial Measures Programme (FMP) is the establishment of transparent deleveraging plans to reduce the Irish banking system to a manageable size and to stabilise its funding base. The Central Bank has agreed with the External Partners that a sustainable Loan to Deposit Ratio for the aggregate domestic banking system is 122.5%. Total deleveraging achieved across government supported banks was €46 billion through end December 2011 against 2011 expected deleveraging of €36 billion. In addition, Irish banks have enjoyed deposit inflows despite the very difficult international environment.
It is important to maintain the progress in downsizing our banking system which was made in 2011, and we are working to refine the deleveraging framework to minimize risks to lending to the economy and discourage excessive competition for deposits. Nonetheless, it is also important, as part of the overall strategy to maintain progress in regard to deleveraging and this momentum will ensure that banks will be better able to support the real economy in the shortest possible timeframe. As you may be aware the deleveraging programme is monitored on an on-going basis and discussed with EU Commission, the ECB and the IMF. Any refinements or adjustments which are required are considered and addressed as part of this process.