Written Answers Nos. 87 - 106
87. Deputy Sandra McLellan asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, the investigation that has taken place in the National Asset Management Agency to identify incidences in which its staff have provided loan information to its borrowers showing the par value of loans and the NAMA acquisition price. [23955/13]
Amharc ar fhreagra193. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will confirm that the National Asset Management Agency has provided loan information to its borrowers showing the par value of loans and the NAMA acquisition price in this specific incidence. [24098/13]
Amharc ar fhreagra194. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, the reason the National Asset Management Agency has apparently provided loan information to its borrowers showing the par value of loans and the NAMA acquisition price in this specific incidence. [24099/13]
Amharc ar fhreagra195. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will outline the commercial disadvantages to which the National Asset Management Agency is exposed by providing loan information to its borrowers showing the par value of loans and the NAMA acquisition price. [24100/13]
Amharc ar fhreagra196. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will confirm in each of 2010, 2011,2012 and to date in 2013, the number of possible breaches of data protection laws that have been reported by the National Asset Management Agency to the Office of the Data Protection Commissioner. [24101/13]
Amharc ar fhreagra197. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will confirm that the National Asset Management Agency has contacted the Office of the Data Protection Commissioner about the release of loan information, the date on which NAMA contacted the ODPC; and if he will make a statement on the matter. [24102/13]
Amharc ar fhreagra198. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will outline the safeguards that exist in the National Asset Management Agency to prevent the release of loan information to its borrowers showing the par value of loans and the NAMA acquisition price. [24103/13]
Amharc ar fhreagra199. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will confirm the number of debtors to whom the National Asset Management Agency has provided loan information showing the par value of loans and the NAMA acquisition price. [24104/13]
Amharc ar fhreagra200. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will confirm that the National Asset Management Agency has provided loan information, including the par value and NAMA acquisition value, to borrowers in respect of loans which do not directly relate to the borrower. [24105/13]
Amharc ar fhreagra201. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will confirm the actions undertaken by the National Asset Management Agency to address the apparent provision of loan information to its borrowers showing the par value of loans and the NAMA acquisition price. [24106/13]
Amharc ar fhreagra202. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 62 of 8 May 2013, if he will confirm that he has confidence in the ability of the National Asset Management Agency to protect confidential loan information relating to its borrowers; and if he will make a statement on the matter. [24107/13]
Amharc ar fhreagraI propose to take Questions Nos. 87 and 193 to 202, inclusive, together.
As I stated in my response to Parliamentary Question 62 of 8 May 2012, the specifics of that matter relate to a position taken by a NAMA debtor in attempting to defend judgment proceedings taken by NAMA against him. I do not propose to comment as this relates to a matter which is within the jurisdiction of the Courts.
NAMA has legal obligations in respect of confidentiality of information under the NAMA Act 2009 and under other legislation including the Data Protection Acts. I am advised by NAMA that, in any case where there is any concern that there may have been a possible data breach, the matter is investigated in compliance with the Data Protection Commissioner’s Personal Data Security Breach Code of Practice and, where required by the Code, notified to the Data Protection Commissioner. Matters referred to the Office of the Data Protection Commissioner are dealt with by that Office in accordance with its statutory remit.
I am assured by NAMA that it regards any data breach with the utmost seriousness and that it assiduously implements any actions required by the Commissioner’s Code of Practice, or recommended to it by the Commissioner in response to breach notifications, to safeguard against possible future breaches. NAMA’s primary concern is to meet its obligations under the Data Protection Acts 1988 and 2003 to process personal data in compliance with those Acts, including taking appropriate measures to protect the security of such data. As there is a well-established statutory framework in place to deal with unauthorised data disclosures, I consider that such disclosures are best managed by the Commissioner and by NAMA within that framework.
88. Deputy Dara Calleary asked the Minister for Finance his views on whether EU wide growth would be enhanced by a looser fiscal policy being adopted by those Eurozone countries with capacity to increase spending; and if he will make a statement on the matter. [23911/13]
Amharc ar fhreagraSound, sustainable public finances are a pre-requisite for confidence and stability and hence for economic growth. Given relatively large deficits and the associated increase in public debt in many EU Member States in recent years, there is agreement among Finance Ministers that fiscal adjustment is necessary. There is also agreement, however, that consolidation should be pursued in a growth-friendly manner and that the speed and scale of consolidation should be differentiated across Member States according to their different needs.
My view is that this approach of differentiated, growth-friendly consolidation is the most appropriate way of supporting EU-wide growth while at the same time putting the public finances of the Member States on a more sustainable basis.
89. Deputy Dessie Ellis asked the Minister for Finance his views on whether the shadow banking industry is 10 times the size of Ireland's GNP as reported; and his views on whether this industry contributes in a fair way to the economy here. [23949/13]
Amharc ar fhreagraShadow banking embraces a disparate range of entities and activities which support investment and capital-raising. It can include Money Market Funds or other “deposit taking” investment products, Special Purpose Vehicles which perform liquidity or maturity transformation, Exchange Traded Funds and other funds which provide credit, firms which provide credit guarantees, insurance/reinsurance firms which issue or insure credit. Shadow banking typically has the following characteristics maturity or liquidity transformation across the balance sheet, where the sources of funding are of shorter maturity or the assets are inherently illiquid; credit creation funded by leverage, which boosts certain measures of the money supply.
Shadow Banking, if well regulated, can perform important functions in the financial system and parts of the Shadow Banking system can contribute positively to the flow of credit and liquidity and help to promote economic growth. Regulatory proposals on Shadow Banking seek to appropriately reflect a balance between the need for better risk management and enhanced transparency and stronger financial stability, and the need for increased and more diversified financing to the economy.
I have been advised by the Central Bank that the reported comparison is not appropriate as the assets and liabilities are primarily held in off-shore sub-custody networks managed by custodians. Interruption and/or failure of a shadow banking entity would not necessarily directly impact Ireland. Shadow banking entities do not benefit from access to the Irish deposit protection scheme nor do they have access to Central Bank liquidity.
On the other hand, shadow banking activities make use of various services located in Ireland such as legal advice, tax advice, accountancy advice, asset servicing, subscriptions and redemptions, valuations and listing. Most of these are high value added activities to the Irish economy through income tax receipts. The Commission will in summer 2013, as a follow up to their Green Paper of March 2012, and the international work coordinated by the Financial Stability Board, address the systemic problems related to shadow banking. My Department is awaiting the publication of the Commission’s proposals and will engage fully with efforts to improve regulation of shadow banking.
90. Deputy Micheál Martin asked the Minister for Finance his assessment of the benefit to the economy of the recent ECB cut in view of the decision of financial institutions not to pass on the cut to customers with variable rate loans; and if he will make a statement on the matter. [23926/13]
Amharc ar fhreagra91. Deputy Denis Naughten asked the Minister for Finance if he will outline the discussions, if any, he has had with the commercial banks to ensure that ECB interest rate cuts are passed on to variable rate owner occupied mortgage holders; and if he will make a statement on the matter. [23658/13]
Amharc ar fhreagraI propose to take Questions Nos. 90 and 91 together.
As I have stated in a previous Parliamentary Question today on the European Central Bank interest rate cuts, the lending institutions in Ireland, including those in which the State has a significant shareholding, are independent commercial entities. I have no statutory role in relation to regulated financial institutions passing on the European Central Bank interest rate change. It is a commercial matter for each institution concerned. Neither have I responsibility for the interest rate paid to depositors by the financial instructions.
The Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. The Central Bank has, however, no statutory role in the setting of interest rates by financial institutions, apart from the interest rate cap imposed on the credit union sector in accordance with the provisions of the Credit Union Act, 1997.
The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. This interest rate is determined taking into account a broad range of factors, including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution’s overall funding arrangements.
I would remind the Deputy that in late 2011 the Taoiseach asked for the Central Bank’s opinion on developments regarding mortgage interest rates and on possible action by the Central Bank in that regard. In a letter to the Taoiseach dated 11 November 2011, the Deputy Governor of the Central Bank stated that the Central Bank would not be seeking the power to have regulatory control over the setting of retail interest rates. He indicated that experience of such controls in the past, and in other countries, did not encourage the Central Bank to believe that such a regime would be advantageous in net terms as the banking system recovers its normal functioning. Binding controls tend to reduce the availability of credit and channel it to the most creditworthy customers, starving smaller and less secure customers from credit. Binding controls would have a chilling effect on the entry of sound competitors in the market. By absolving banks from their responsibility to price risk accurately, binding interest rate controls would, especially during the recovery phase, impede progress towards the re-establishment of bank management practices that can ensure a healthy and free-standing banking system no longer dependent on the Government for bail-outs. The Deputy Governor mentioned also that, within its existing powers, and through the use of persuasion, the Central Bank would continue to engage with specific lenders which appear to have standard variable rates set disproportionate to their cost of funds and this is a course of action I expect the Central Bank to continually appraise.
On specific economic assessments of changes to interest rates, I would refer the Deputy to the recent Stability Programme Update 2013 which published analysis done by the ERSI using their HERMES model of the effect of a 1% change in interest rates on key macroeconomic variables on the economy. The simulations show the impact that a 1 percentage point increase in the rate in the first year for the following four years beginning in 2013 could reduce GDP by up to 1.7 per cent by 2016 and would add 1 percentage point to the deficit as a percentage of GDP by 2016. While the simulated effect is broadly symmetric, the proximity of policy rates to the zero lower bound means the potential magnitude of the effect could be larger for a rate increase compared to a rate decrease.
92. Deputy Michael Colreavy asked the Minister for Finance the number of returns as a percentage of liable households that have been received to date by the Revenue Commissioners for the local property tax; the value of the outstanding liable payments; and the expected outturn if there was 100% compliance. [23964/13]
Amharc ar fhreagraI am informed by the Revenue Commissioners that Local Property Tax (LPT) Returns, personalised letters and an LPT Guide have issued to owners of 1.66 million residential properties either by post or by way of their ROS (Revenue Online Service) inbox. The Commissioners have confirmed that in excess of 948,522 LPT Returns have been filed up to close of business on Monday, 20 May 2013. This represents 57% of the total Returns issued. Of the returns received, 657,157 were filed electronically and 291,365 were paper returns.
According to budget estimates the LPT is expected to generate an overall yield of €250 million in 2013 and €500 million in 2014. Up to the end of April 2013, approximately €22 million had been collected.
As the Deputy will appreciate, with returns being filed on a constant basis, the Commissioners' focus is on processing the returns, dealing with correspondence, telephone calls and payment processing. It would not be practical or particularly useful for the Revenue Commissioners to carry out detailed analysis on the final filing rate for liable residential properties, the value of the outstanding liable payments or the expected outturn until after the online filing deadline of 28 May 2013 has passed.
94. Deputy Robert Troy asked the Minister for Finance his views on whether the National Assets Management Agency is meeting its obligations in respect of social housing; and if he will make a statement on the matter. [23940/13]
Amharc ar fhreagraNAMA advises that it has identified in excess of 4,000 residential properties controlled by its debtors and receivers as being available for the provision of social housing. This represents a very substantial contribution by NAMA in the context of the limited number of available residential properties in Ireland controlled by its debtors and receivers and the range of policy measures being adopted by this Government to meet demand for social housing provision. The onus for determining the suitability for social housing of the properties identified by NAMA rests, in the first instance, with the local authorities, which assess, in conjunction with the Housing Agency, the demand for identified houses and apartments by reference to a number of criteria. As soon as local authorities have confirmed demand for units, the Approved Housing Bodies (AHBs) are asked to confirm their interest and to take the practical steps necessary to complete the lease or purchase of the properties.
I am advised that to date demand has been confirmed by the local authorities for 1,574 of the properties that NAMA has made available. Another 502 properties are being evaluated bringing the overall total that may ultimately be deemed suitable to 2,076. The local authorities have confirmed that there is no demand in respect 1,226 of the properties. I am advised by NAMA that, in the time required to assess and confirm demand for units, 806 properties were sold or privately let by their owners or duly appointed receivers.
Of the properties for which demand has been confirmed, 294 properties have been delivered for social housing to date, with contract terms signed in respect of a further 73 properties. This brings the overall total of residential properties completed and committed to social housing to 367 properties, across 19 developments in ten counties. A further 334 are at an advanced stage of negotiation between NAMA debtors or receivers and various AHBs.
I am advised by NAMA that once demand has been confirmed for properties and contracts signed there is no impediment to the early delivery of properties by its debtors and receivers. However, issues such Multi-Unit Development compliance, planning compliance, site resolution and outstanding completion works often need to be addressed before the properties are ready for occupation. NAMA, through its debtors and receivers, is working to resolve these issues as a matter of priority on the identified developments.
I am further advised by NAMA that it established the Special Purpose Vehicle (SPV), National Asset Residential Property Services Limited, for the purpose of acquiring properties from its debtors and receivers in order to speed up their direct leasing to housing authorities. I understand that the Irish Council for Social Housing (ICSH) has recently agreed to the lease template put forward some time ago by NAMA and I expect that this will expedite the early delivery of properties.
NAMA is working closely with the Minister for the Environment, Community and Local Government and the Minister of State for Housing and Planning in relation to this very important initiative and all parties are committed to the maximum possible delivery of residential units in 2013. The Deputy will appreciate that the housing authorities have a key role in this regard and the Housing Agency is working very closely with these bodies to facilitate delivery of units. However, the pace at which units are delivered is not controlled by NAMA but by the Housing Agency/Social Housing Bodies/Local Authorities agreeing to lease. I am satisfied that NAMA has brought the initiative as far as it can at this point in time.
95. Deputy Gerry Adams asked the Minister for Finance his views on the need for a review of the SARP. [23944/13]
Amharc ar fhreagraSection 14 of Finance Act 2012 introduced the Special Assignee Relief Programme which is designed to reduce the cost to employers of assigning key individuals in their companies from abroad to take up positions in the Irish based operations of their employer. Paragraph 10 of Section 14 provides that relevant employers must submit an annual return to the Revenue Commissioners detailing, inter alia, the number of employees and the amounts of exempt income claimed under the programme. As 2012 was the first year of the programme, this return was not sought until after the end of the tax year 2012 in order to ensure that an accurate picture as possible of take up levels over a full tax year could be provided.
At the time of its introduction, it was estimated that for every 100 assignees that avail of the programme up to the maximum level of relief, the tax cost would be just over €5 million. Employer returns received to date for 2012 indicate that there were 6 individuals who qualified for the relief with 2 of them receiving an aggregate total tax-free remuneration of €39,767. Job increases were reported as numbering 26 with 2 jobs also reported as retained because of the relief. It is expected that the 4 individuals who are not reported in the employer returns as receiving tax-free remuneration are expected to claim it when they submit Form 11 tax returns for 2012 in late 2013.
It is possible that not all employers have submitted a SARP return yet. Also, the figures provided do not include the details for claims that are not included in employer returns received to date but will be made in the Form 11 tax returns for 2012 to be filed under the self-assessment system in October/November of 2013.
The scheme was introduced for an initial three-year period ending on 31 December 2014, at which point it will be reviewed. At that stage we should have additional information regarding the number of individuals availing of the exemption, the sectors of industry that the individuals are employed in, the cost of the programme and the number of jobs created or retained as a result of the relief. All of this information will feed into the review. Depending on the outcome of that review, I will decide whether the relief should be retained.
It is worth nothing that the existence of similar incentives in other European countries such as the Netherlands, Sweden and Switzerland would indicate that such incentives can be a persuading factor when companies decide where to locate investment projects. In tandem with our corporation tax rate, this relief will help us to compete for Foreign Direct Investment.
96. Deputy Mary Lou McDonald asked the Minister for Finance if he has met with the Ballyhea says No Group and examined their proposals for economic recovery. [23946/13]
Amharc ar fhreagraI have not met the Group referred to by the Deputy. On 12 March 2012 I wrote to Mr Diarmuid O’Flynn, a member of the group referred to by the Deputy. In that letter I made the following points to Mr O’Flynn:
1. Reputation, reliability and commitment were essential elements to regaining our financial independence and that reneging on senior debt would not enhance the Irish position and may put contagion pressures on eurozone countries.
2. If we were to postpone or suspend payment to creditors in IBRC this would have a significant impact on both the Bank and ultimately the State in that it could lead to the Bank becoming insolvent with an increase in the cost to the state to resolve IBRC and the financial market’s view of Ireland as a place to do business or invest would be seriously undermined.
3. The value of support we receive from our European Partners far outweighs any short term gain from imposing burden sharing on the bonds in question in the face of European opposition to such a move.
However as I have said in my letter to Mr O’Flynn I was eager to have Promissory notes examined to see if they could be re-engineered in a better way for the State. The promissory notes were replaced with a portfolio of Government bonds in February 2013. This may not have been possible had I followed the recommendations set out by the Group referred to by the Deputy in her question. The provision of a longer term non-amortising (up to 40 years) portfolio of Government bonds to replace the amortising Promissory Notes which occurred in February 2013 will have benefits from a market perspective as it ensures the liability to repay is beyond most credit investors’ time horizon. This transaction was noted by the ECB.
97. Deputy Mick Wallace asked the Minister for Finance the number of financial vehicle corporations based here; the number of persons employed by these corporations; and if he will make a statement on the matter. [23980/13]
Amharc ar fhreagraFinancial vehicle corporations (FVCs) are undertakings which are constituted pursuant to national or EU Law and whose principal activity meets both of the following criteria:
- to carry out securitisation transactions which are insulated from the risk of bankruptcy or any other default of the originator;
- to issue securities, securitisation fund units, other debt instruments and/or financial derivatives, and/or to legally or economically own assets underlying the issue of securities, securitisation fund units, other debt instruments and/or financial derivatives that are offered for sale to the public or sold on the basis of private placements.
There were 692 resident Irish FVCs as of end-2012. Statistics in relation to the activities of Financial Vehicle Corporations are published on the Central Bank website at http://www.centralbank.ie/polstats/stats/fvc/Pages/fvc.aspx.
The Central Bank does not collect information in relation to staff numbers at FVCs. Individual FVCs which are resident in Ireland file company returns with the Companies Registration Office (www.cro.ie). The information on staff numbers at FVCs is publicly available there.
98. Deputy Aengus Ó Snodaigh asked the Minister for Finance the action that has been taken by AIB since its commitment last year to reduce the excessive pensions that its former executives receive. [23965/13]
Amharc ar fhreagraThe Deputy will be aware that AIB has previously confirmed that it has written to former senior executives of both AIB and EBS Limited requesting a voluntary reduction in their pension levels. The Bank has informed me that is not disclosing the names of these individuals on confidentiality grounds, but that it has to date issued approximately forty letters. AIB is not in a position to release information on former employees without the express consent of the individuals.
Given this is an on-going complicated process from a tax, legal and Revenue perspective AIB has indicated that it is not in a position to confirm the levels of reductions achieved to date.
99. Deputy Brian Stanley asked the Minister for Finance the way the Central Bank of Ireland will choose the pilot town for the trial removal of 1 and 2 cent coins; and the stage the selection process is at. [23961/13]
Amharc ar fhreagraIn 2011, I requested that the Central Bank examine ways to improve Ireland’s payment infrastructure. The Central Bank established a Steering Committee which prepared and submitted the National Payments Plan to me. Government subsequently approved the plan in April 2013. The National Payments Plan will target improving consumer payments systems and increasing the efficiency of the use of cash amongst other things. The National Payments Plan could result in savings of up to €1 billion per annum in the economy. The National Payments Plan makes a recommendation surrounding the use of one and two cent coins in Ireland. There is evidence that one and two cent coins are not actively used by consumers. It is expensive to continually mint and re-issue new coins. The National Payments Plan does not envisage abandoning these coins; they would remain legal tender.
The Steering Committee intends to trial the use of a rounding convention in a pilot project. The rounding convention that will be trialled in the pilot is entirely voluntary on the part of both consumers and retailers. The location for the pilot project has not yet been identified. I am advised that it will be chosen on the basis of objective criteria i.e. of sufficient size and representative of Ireland’s population. The pilot is expected to run in August/September of 2013 and to finish by November 2013. A report on the basis of the pilot project will be submitted to and reviewed by the Steering Committee, which will subsequently report to Government through my Department. A Government decision informed by that report will follow.
A change in the legal tender status of these coins requires action at EU level. Consideration of this issue is currently ongoing at EU level. On 14 May the Commission issued a communication to the European Parliament and Council relating to the continued issuance of the one and two cent coins.
100. Deputy Jonathan O'Brien asked the Minister for Finance if, when banks increase the standard variable mortgage rate on a mortgage that is 90 days or more in arrears, they are automatically assessed to not have provided a sustainable solution to the distressed borrower in the context of the target for banks to have offered at least 20% of their distressed mortgage borrowers sustainable solutions by the end of June 2013. [23953/13]
Amharc ar fhreagraThe Central Bank has advised that in the context of its publication of performance targets for borrowers in arrears over 90 days, in determining whether a proposal constitutes a sustainable solution, the lender needs to evaluate both actual and prospective affordability for the borrower’s affordability and the capital implications for the credit institutions in terms of their prudential responsibility to minimise losses. While the Central Bank is not mandating any particular model of restructuring and while sustainable solutions will be arrived at on a case-by-case basis, there are some fundamental principles that must be respected, as follows:
- The affordability assessment of the borrower needs to be based on both their current and prospective future servicing capacity for all borrowings; assumed prospective future increases in the debt servicing ability of the borrower must be credible and conservative.
- Lenders need to apply a realistic valuation of the borrower’s assets, in particular their property. This also applies to any assumption of potential asset price appreciation, as well as the estimated costs related to a potential foreclosure of property; and
- Lenders need to use an appropriate interest rate when discounting future income flows, which should take account of the lender’s cost of funds.
The Central Bank has informed me that it will assess compliance with these principles in its supervisory audit of compliance with the targets, including through analysis of a sample of modifications.
101. Deputy Peadar Tóibín asked the Minister for Finance if he will outline Ireland's options on potentially leaving the Troika programme; and the way the use of outright monetary transactions would affect any exit. [23947/13]
Amharc ar fhreagraAs the Deputy is aware, the EU-IMF Programme of Financial Support is envisaged to run to the end of 2013. The Government’s focus is now firmly fixed on exiting from the programme. It is the Government’s intention to achieve a successful and durable exit from our programme and we are doing all we can to this end. We continue to meet our programme conditions and our strong implementation record has been recognized by our external partners. The recent highly successful sale of long term bonds by NTMA is another very significant step towards regaining full market access.
The options available to Ireland on exiting the programme fall into two broad categories. A successful exit without any further support or a successful exit supported by the ESM’s and the IMF’s precautionary backstop facilities. By way of information, the precautionary financial assistance which the IMF and the European Stability Mechanism (ESM) can provide is as follows:
- The ESM Treaty provides, in Article 14, that the Board of Governors may decide to grant precautionary financial assistance in the form of a precautionary conditioned credit line (PCCL) or in the form of an enhanced conditions credit line (ECCL). The Treaty also provides for the conditionality, terms and conditions to be attached to such assistance. Further information in relation to these instruments is available on the ESM website at http://www.esm.europa.eu/.
- The IMF has a number of precautionary or standby type facilities including Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), the Extended Funding Facility (EFF) and the Stand By Arrangement (SBA). These different instruments are designed to address different sets of circumstances, and the terms and conditions attaching to them are structured accordingly. Further information on these instruments is available on the IMF website at http://www.imf.org/.
All relevant options will be considered in the light of what will be appropriate for Ireland at the time of our exit. The issue of our exit options has yet to be fully considered by Government and accordingly no decisions have been taken to date.
In relation to the ECB’s Outright Monetary Transactions (OMT), the Governing Council of the ECB made a decision to establish OMTs on 2nd August 2012, and issued a press statement on 6th September 2012 which outlined its technical features. According to this ECB Press Release, the purpose of OMT is: “Safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy”. The ECB press statement also notes that the ECB’s Governing Council will decide on the start, continuation and suspension of OMT, following a thorough assessment, in full discretion and acting in accordance with its monetary policy mandate. It is therefore clear that the decision on whether to grant OMT or otherwise in any particular case is a matter for the ECB, which is an independent body.
102. Deputy Alan Farrell asked the Minister for Finance the measures taken by him in order to minimise the impact of counterfeit goods on the Exchequer; if he intends to introduce harsher penalities as called for by Retail Ireland; if he will consider a public awareness campaign to highlight to consumers the effect illegal trading has on the economy; and if he will make a statement on the matter. [23655/13]
Amharc ar fhreagraCounterfeit goods are a worldwide problem and represent a serious threat to legitimate businesses. In addition, they defraud customers who unknowingly buy them, and can pose health and safety risks. The Revenue Commissioners are responsible for acting against the importation of counterfeit goods into the State from outside the EU. I am advised that Revenue made a total of 5,580 seizures of such goods, with a value of €5,437,334, during 2012. In the first quarter of 2013 there were 1,540 seizures with a value of €819,684. The range of goods seized is extensive and includes body care items, clothing and accessories, mobile phones and other electronic equipment, CDs, DVDs and toys.
Action against counterfeit goods that are in free circulation within the EU is the responsibility of An Garda Síochána. I am advised that Revenue and An Garda Síochána work closely together, and share intelligence on an ongoing basis, in tackling the overall problem of counterfeit goods. There is close cooperation also at international level, including, for example, participation by Ireland in international operations coordinated by the World Customs Organisation.
The active cooperation of intellectual property rights holders is also essential in dealing with this problem, and they can provide valuable assistance to the work of the enforcement authorities through practical steps such as responding quickly to requests for confirmation of the status of suspected counterfeit goods.
The penalties for illegal importation of counterfeit goods are set down in section 186 of the Customs Consolidation Act 1876. On summary conviction, a fine of €5,000 or a term of imprisonment not exceeding 12 months, or both, can be imposed. On conviction on indictment, a fine of €126,790 or, in the case of goods with a value exceeding €250,000, a fine of three times the value of the goods (including duty and tax), or a term of imprisonment up to 5 years, or both a fine and imprisonment, may be imposed. There are no proposals at present to increase these penalties, but the position will be kept under review.
I recognise the value of raising the awareness of consumers of the negative impact of the trade in counterfeit goods, and the potential safety risks involved, and believe that the holders of intellectual property rights have a key role to play in conveying this message to consumers. I understand that Revenue works with other stakeholders, where possible, to highlight the problems associated with such goods and will continue to avail of all opportunities that arise to raise the public’s awareness regarding counterfeit goods.
103. Deputy Catherine Murphy asked the Minister for Finance the total value of residential mortgages on the loan books of each covered financial institution which are in arrears of 90 days or more; the total value of all tracker-mortgages currently held by the same institutions; if the covered institutions are adequately capitalised at present to cover losses arising from said mortgages; if not, where he will source such additional capital; and if he will make a statement on the matter. [23659/13]
Amharc ar fhreagraThe covered institutions have provided me with the following information:
AIB
All relevant disclosures in relation to AIB’s mortgage portfolios, including arrears data and tracker mortgages, for December 2012 are made on page 88 to 111 of AIB’s 2012 Annual Accounts published on 27th March 2013. AIB currently exceeds the minimum regulatory capital requirements of 10.5% as set out by the Central Bank of Ireland. The objectives of AIB’s Capital Management Policy (which is subject to supervisory review and evaluation) are to ensure that it has sufficient capital to cover the current and future risks inherent in its business and to support its future development. AIB’s core tier 1 ratio remains robust at 15.1% at December 2012 and its total capital ratio was 17.6%.
BOI
Bank of Ireland's annual report for the year to 31 December 2012 gives comprehensive disclosures on its Residential Irish Mortgage Portfolios (particularly pages 321 - 333), its accounting policies (particularly pages 148 - 169), its credit risk management and asset quality (particularly pages 55 - 77) and capital position (particularly pages 26 - 28 and 96 -97).
PTSB
The value of loans greater than 90 days in arrears is disclosed on page 17 of Permanent TSBs 2012 Annual Report. For Republic of Ireland Residential that figure was €5.5bn. Of the €24.6bn Republic of Ireland Residential loans disclosed on page 17 approximately 66% were contractually linked to the ECB base rate. The Group is adequately capitalised with a Core Tier 1 ratio of 18.0% at December 2012 to cover all losses anticipated on all its loan books; however, it continues to:
- Work to find suitable long term treatments for its customers in arrears.
- Drive down its cost of funding so that the tracker mortgages are less of a drag on overall financial performance and so that it can profitably extend new credit into the economy.
- Find savings and efficiencies in all aspects of its operations.
I have also been informed by the Central Bank that the Covered Banks are required to maintain minimum capital requirements for all material risks (including credit risk) under the Capital Requirements Directive. In addition the banks subject to PCAR are required to maintain Core Tier 1 capital above 10.5%. These banks were also stress tested in 2011 under PCAR as part of the FMP in order to withstand losses in their loan portfolios (including mortgages) under an assumed adverse scenario.
104. Deputy Pádraig Mac Lochlainn asked the Minister for Finance the number of real estate investment trusts that will be introduced here by the end of 2013; and if he will make a statement on the matter. [23957/13]
Amharc ar fhreagraThe legislation introducing a tax framework for Real Estate Investment Trusts (REITs) was signed into law on 27th March in Finance Bill 2013. The future development of Irish REITs will depend very much on market response to the product, so it is not possible to state the number, if any, of REITs which will be introduced by the end of 2013. REITs by their nature are large collective investment vehicles which take time to form – the time frame for large property transactions is calculated in months rather than weeks, and the public listing of a company is also a significant undertaking.
I have however received feedback from a number of sources indicating that interest is being expressed in the Irish REIT framework.
105. Deputy Pearse Doherty asked the Minister for Finance his views on the outsourcing, unique in the Eurosystem, of essential services at the Central Bank of Ireland including IT and security services. [23942/13]
Amharc ar fhreagraThe responsibility for operational and security policies at the Central Bank is a matter for the Central Bank Commission and the Governor of the Bank. However I understand the Central Bank has entered into a contract with HP to provide the physical data centre environment to host its IT systems, manage the technical infrastructure aspects of these systems and provide hosting facilities at a backup data centre for the purposes of business continuity and replacing existing facilities which are at ‘end of life’. HP will not have access to any of the banks business applications. The security of the technical aspects of the systems will be achieved through a combination of physical and logical protections, procedural and process protections, security features including encryption where necessary and on-going monitoring and reporting features. The steps taken comply with the Central Bank’s internal security policies and those of the ECB and are underpinned by the contractual and legal arrangements with HP.
The new data centre environment will negate the requirement for the Central Bank to build two new data centre facilities and there will be no ‘outsourcing’ of Central Bank staff arising from the contract with HP. HP was engaged following a competitive tender process, which included assessment across a number of criteria including security and cost. The process was approved by the Central Bank Commission.
I am informed by the Central Bank that some other Central Banks have engaged external specialist private companies to provide elements of the services similar to those which will be provided under this contract. It is to be expected that other Central Banks will evaluate external data centre options when they come to an ‘end of life’ scenario with their existing facilities.
In relation to security arrangements, the Central Bank is not in a position to disclose or discuss the details of its security model or operations. However, security operations are reviewed regularly to ensure they operate to current best practices and in the most effective and efficient manner.
106. Deputy John Halligan asked the Minister for Finance if he has had any discussions with his Cypriot counterparts on the possible implications for Ireland in terms of exports; and if he will make a statement on the matter. [15570/13]
Amharc ar fhreagraI interact with all of my EU counterparts as part of my regular engagement at EU level. My most recent engagements at Eurogroup and ECOFIN on 13/14 May were part of this on-going and constructive dialogue. At the last meeting, the Eurogroup issued a statement welcoming the decision of the ESM to approve the first tranche of financial assistance to Cyprus on Monday 13 May in the context of the macroeconomic adjustment programme agreed between Cyprus and the euro area Member States on 25 March and the MoU signed between Cyprus and the European Commission at the end of April.
The fact that an agreement has been reached is an important step towards the stabilisation of the Cypriot economy reflecting the Eurogroup’s unwavering commitment to preserving the financial stability of the euro area and its Member States. The euro area is one of Ireland’s main trading areas so any policy effort that improves the economic and financial conditions leading to a recovery in the euro area should have positive implications for Irish exports.
