Brian Cowen (Laois-Offaly, Fianna Fail)

I have given a formal statement in reply to Deputy Kenny's initial inquiry about this matter. I emphasise it is important that people act not in a speculative manner — I am not suggesting Deputy Kenny is doing so — but in a responsible manner in respect of this matter. They should not suggest that any particular way forward is the panacea for all ills. We are in the midst of an international recession and of a situation where credit markets have yet to return to normalcy. The detailed analysis and report from PricewaterhouseCoopers is as I outlined in my initial statement. People must be measured in assessing what is the current stated position. The Government will do all it can to facilitate a strong banking sector that is capable of providing funding for Irish commercial business. We will do everything we can to achieve that but it is important to avoid suggesting that any particular course of action taken immediately would provide the overall solution to this problem. I indicated yesterday that under the State guarantee scheme the question of banks having to submit business plans to show they are prepared to provide credit lines to Irish businesses is an important factor in the Government's consideration of these plans.

If it was the case that capital was provided by private or other means to the banking sector, that would represent capital for the banks concerned. It would not be automatically provided as cash flow to Irish businesses but would go towards improving the capital adequacy ratios of the receiving banks. It is important that people do not think the injection of capital per se provides for increased lines of credit.

We have received a detailed report which confirms that the regulatory capital requirements are being met by the institutions under review and demonstrates in a number of stress scenarios that capital levels in the covered institutions will remain above regulatory levels in the period to 2011. That is an important statement in the context of considering the options which may be available to those institutions in dealing with the changing views in international markets regarding expectations for capital levels in the banking sector.

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