Mr. Jean-Claude Trichet:

Thank you very much. It's a very important question. And, as I referred to a moment ago, it was because Brian and I wanted to be absolutely clear on what was the relationship between the ECB and the Government on top of all of, I would say, exchange of views in this very, very dramatic circumstances. Responsibility for the provision of ELA lies with the NCB concerned, so the national Central Bank of Ireland. In this particular case, as in all other cases, and you have a number of cases even today, the Governing Council's related competence is based on Article 14.4 of the statute of the European system of central banks and of the ECB itself, the European Central Bank. The Governing Council of the ECB may restrict the performance of national functions, such as ELA operations, if it considers that such operations would interfere with the euro system objectives and tasks. This means that if the ELA is provided in large amounts, the Governing Council needs to assess the features of the transactions, their liquidity effects, and whether it would be appropriate to impose specific conditions in order to protect the integrity of the ECB's monetary policy.

Additional procedures underlying the Governing Council's role with regard the provision of ELA are aimed at adequately ensuring that these arrangements and their potential effects do not interfere with the single monetary policy. Moreover, the Governing Council has to adhere to the prohibition of monetary financing. In the case of Ireland, the level of liquidity provided by the euro system in support of the Irish economy had reached, by November 2010, around €140 billion, including ELA. It was representing around 85% of Irish GDP. I mentioned 100% at the peak afterwards and 85% was, of course ... has no equivalent the world over. So this represented one quarter of the ECB's total lending at the time; one quarter for Ireland in a euro area where you have Spain, Italy, Germany and the like, and it was a totally unprecedented level, of course. And in the letter you are referring to, implicitly we ... I was saying ... whenever ELA is provided in significant amounts, the Governing Council needs to assess whether it is appropriate to impose specific conditions in order to protect the integrity of our monetary policy. In addition, to ensure compliance with the prohibition of monetary financing it is essential to ensure that ELA recipient institutions continue to be solvent. And it is this latter consideration, the solvency of the institution, that is reflected in the four points mentioned in that letter, that would be absolutely necessary in the view of the Governing Council of the ECB to ensure continued solvency of the Irish banking system.