Mr. Feargal Ó Brolcháin:

We are dealing with the draft heads of the Central Bank Bill 2014. This legislation has two purposes, the first of which is to extend Part 3 of the Central Bank Act 1971 so that it will apply to building societies as well as to banks.

Specifically, this will make provision for the effective and expeditious transfer of the business and other assets and liabilities of building societies, and for those and other purposes to amend the Central Bank Act 1971. The second purpose is to make provision for certain payments out of the Central Fund to the account established by the European Stability Mechanism, ESM, as agent on behalf of the euro area member states to receive payments for the purpose of providing financial assistance to the Hellenic Republic and for related matters. I will deal with the measure for the Hellenic Republic while my colleague Mr. Mac Donncha will deal with the amendment of the Central Bank Act.

The second purpose of the Bill relates to measures for the Hellenic Republic, which I will refer to as Greece from now on. This is to provide a legislative basis for Ireland to make transfers to an intermediate account operated by the ESM on behalf of the euro area member states. These transfers are to be an amount equivalent to the income that accrues to the Central Bank of Ireland from the securities market programme portfolio of Greek Government debt. In November 2012, as part of a package of measures designed to help Greece, the euro area member states agreed that the securities market programme-related income of member states would be transferred to Greece under certain conditions. In January 2013 the euro area member states agreed that the ESM would be the agent for making such a payment.

The ESM accordingly established an intermediate account into which the euro area member states can place an amount equivalent to the income of the securities market programme portfolios accruing to the national central banks as from budget year 2013. Member states under a full financial assistance programme are not required to participate in this scheme for the period in which they are in receipt of financial assistance. As Ireland exited its EU-IMF programme of financial assistance in December 2013, the measure now applies to us. The next transfer date for this measure is 1 July 2014, which is the earliest date by which Ireland could be required to make a payment. The necessary legislation needs to be in place by then.