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

Probably in the next couple of months but certainly well in advance of stress testing of the European banking system. I will give the Deputy one example of what I am talking about. Tax credits arising from losses in the banks are regarded as core tier 1 capital. Of course, there have been a lot of losses in the Irish banks which means that there are a lot of tax credits available. During the Basel discussions a suggestion was made that tax credits would no longer apply as core tier 1 capital. The terms of the Basel discussions will come into operation in 2017. In the next round of discussions, however, allowance was made for a phasing-in period. Initially it was agreed that tax credits would be allowed until 2024, but that has not been absolutely nailed down yet. If the Irish banks could avail of tax credits until 2024, no additional problems would arise. The Deputy will notice in the Finance Bill that one of the measures I included involved the removal of the prohibition on the banks from freely using their losses because I had this consideration in mind. We have still not received definitive advice from the ECB on what instruments will finally contribute to the 8% core tier 1 capital that will be required. It is not a dramatic crisis issue or anything like that because the stress tests for the European banking system will not take place until late October or November next year. There is a long lead-in time. I am simply alerting the committee to the fact that there are still decisions to be made on the protocols for the stress testing and the particular issue of core tier 1 capital. We are watching matters very closely in the Irish interest.