Brian Lenihan Jnr (Dublin West, Fianna Fail)

At all stages in the drafting of this legislation it was appreciated by the Government that provision would have to be contained in the legislation dealing with credit institutions. A credit institution is an EU legal term which covers any bank in the EU. As Deputy Rabbitte rightly pointed out, many of the six named Irish domestic institutions have overseas subsidiaries and, therefore, a systemic issue could arise concerning the subsidiary for which the Irish State would be responsible. These entities are regulated by the Irish regulator. The asset figures disclosed to the House include their assets, as I understand the position. Therefore the asset figures I gave earlier include the overseas subsidiaries of the six domestic institutions. It was always appreciated that a degree of flexibility would have to exist in the legislation, but no decision has been taken by the Government other than to provide the guarantee for the six institutions and to consider on a case by case basis both the overseas institutions and the local credit institutions in Ireland which have external ownership. As I said already, these institutions fall into different categories. Although I do not want to identify them, there are institutions which are wholly headquartered in other jurisdictions and do not have a domestic regulatory framework in this jurisdiction. Of course it is difficult to envisage circumstances in which the Irish State would then be in a position to provide a guarantee to them. Deputy Rabbitte also asked about the covered bonds.

See this speech in context