Brian Cowen (Laois-Offaly, Fianna Fail)

It is important that discussions on these matters take cognisance of possible reactions outside this House and to ensure we are responsible and prudent in this regard. The joint board of the Central Bank and Central Bank and Financial Services Authority of Ireland, CBFSAI, has submitted to the Minister for Finance a report on the financial position of the six major institutions covered by the bank guarantee scheme. The Minister has met with the Governor of the Central Bank, the Financial Regulator and PricewaterhouseCoopers, PwC, to discuss the report which presents an analysis of the capital positions of the six institutions having regard to their loan book. The content of the report is, of course, commercially sensitive, the details of which cannot be disclosed.

The report confirms that all the institutions reviewed are in excess of regulatory capital requirements as of 30 September 2008, the date the guarantee scheme was announced by Government. The PwC report demonstrates, under a number of stress scenarios, that capital levels in the covered institutions will remain above regulatory levels in the period to 2011. The Government's guarantee scheme has been successful in safeguarding the stability of the Irish banking sector and in restoring its liquidity position. However, the Minister is aware that international market expectations in respect of capital levels in the banking sector have altered and that meeting these expectations may be challenging with consequences for the sector and the wider economy. The Minister expects that the covered institutions will explore fully the potential for meeting these capital needs through raising private capital and the disposal of appropriate assets and is, of course, keeping the matter under close review.

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