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

First, how are the banks funded? They take in deposits, and the deposit flow into the banks has increased. If one looks at the project as a repair of the banking system, the fact they are getting an increased flow of deposits is a good indicator that people with savings believe the banks are being repaired. They are now at the stage where I think interest rates on deposits will probably come down because they have a strong flow of deposits. Much of their funding also comes from the emergency liquidity assistance, ELA, funding from the European Central Bank. However, it is not that the ECB is cutting back on the amount of funding available but that with the increased intake of deposits and the deleveraging of the banking system, the Irish banks require less than they did previously. It is a demand-driven scheme rather than a supply-driven scheme.

On the sale of the banks, one would look first at values. We own 15% of Bank of Ireland. We also have preference shares there which will be taken out at some point. We own 99% of AIB, effectively the whole shareholding. The National Pensions Reserve Fund calculates values and it puts a value of between €8 billion and €10 billion on this. This year's figure was revised earlier this year; it was €8.1 billion. Last year's figure was €8 billion. This is inexact, however, because one is assuming there is a willing buyer.