Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I can confirm to the Senator that our intentions are aligned once more in the case of this amendment. It is not intended that the SBCI will have any capacity to issue letters of comfort which are legally binding guarantees. This term - "letters of comfort" - is used to describe assurances provided to lenders or other institutions where there is no legal or statutory basis for a guarantee, or where a limit on a guarantee has already been reached. As such non-binding assurances do not have a legal basis, they would have no effect. The issue the Senator is attempting to deal with is adequately provided for in section 18 of the Bill, which provides for the issue of guarantees and subjects that power of guarantee to limitations so that any letters of comfort issued cannot legally become a call on the State. As regards the application of the State Guarantees Act 1954, it is considered preferable to include the power to issue guarantees in the legislation setting up the SBCI, rather than inserting the SBCI as a body covered by the State Guarantees Act 1954, as amended.