Brian Lenihan Jnr (Dublin West, Fianna Fail)

We are still devising appropriate criteria and standards to even evaluate the issue of whether they can be admitted. We have to proceed with great care and caution in this matter. The emergency which faced the Government last Monday evening related to the six Irish domestic institutions. We have dealt with that in the legislation. I do not think the House would have thanked me for bringing forward legislation next week containing a definition of "credit institution" to work out the consequences for credit institutions which are subsidiaries of these institutions or which are based in this jurisdiction. That is the position concerning that aspect of the Deputy's question.

As regards the covered bonds, as I understand the position, a covered bond is a private contractual arrangement backed up by a security. That is something in which the State is not involved under this legislation other than by way of collateral guarantee, which is given to all banking transactions under this legislation. The Deputy graphically portrayed me as conferring some sort of stamp on that transaction, but that is not the case of course. What is the case, however, is that all borrowing by Irish banks, in whatever form it takes within the terms of the legislation, is guaranteed ultimately by the Irish State. That is what the legislation contains.

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