Joan Collins (Dublin South Central, People Before Profit Alliance)
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Question 220: To ask the Minister for Finance the safeguards in place to prevent a possible conflict of interest in relation to the European Central Bank's insistence that the State pays off the Anglo-Irish bond-holders, in the context in which the names of the benefitting bond-holders are being denied to him and he cannot therefore guarantee that there is no relationship between the members of the Board of the ECB who are enforcing this insistence on bondholder payouts and the actual benefitting bondholders. [19125/12]

Michael Noonan (Limerick City, Fine Gael)
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I am advised that the process of issuing new bonds is normally through underwriting, where one or more securities firms or banks form a syndicate buying the entire bond issue from the issuer and then re-selling to investors. Primary issuance is arranged by these syndicates who contact potential investors and advise the bond issuer in terms of timing, tenor and pricing of the bond issue. The bond issuer will likely have little knowledge of the original owners of the bonds; also these initial investors may over time sell the bonds to other investors.

Bonds are usually issued in bearer form which means that the purchasers of the bonds are unknown, with the bonds usually held by a securities depository company (e.g. Euroclear and Clearstream). When paying interest and principal the bond issuer will transfer the required funds to the securities depository company who in turn will pay the funds through to the bondholders.

The function of the securities depository company is to receive the appropriate interest or principal payment for the entire bond issue from the issuer and to distribute the required amounts to the individual bondholders. This is a standard process for all such issuances. Therefore throughout this entire process the bond issuer is unaware of the individual bondholders' details.

I am satisfied that advice provided by the ECB is based purely on its merits have regard to role and function of the ECB. Further, I understand that the Members of the ECB Executive Board are, as one would expect, subject to stringent conflict-of-interest protocols.