Thursday, 5 February 2009
Stabilisation of the Public Finances: Motion (Resumed)
Brian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
With regard to the banks, Deputy Michael D. Higgins referred to the Swedish example. I agree that the identification of the assets which are at risk is crucial to the determination and resolution of their problems. We have made progress on this through the work of the PricewaterhouseCoopers assessment of the exposures of the banks. We built on this with auctioneering advice. In the context of any capitalisation the due diligence exercise will yield further information to enable us to do a far more precise identification of risk before we formulate policy on it. I would be reluctant to commit the taxpayer on any issue connected with risk without a full and definitive assessment of the risk in the institutions themselves and we must await this assessment. In general terms I agree with the sequencing outlined by Deputy Higgins that the assessment of risk is vital in finally addressing the problems posed within the banking sector.
Deputies will note that when the State made the offer to Anglo Irish Bank we followed up with a due diligence and this due diligence influenced me and the Government in arriving at the determination that it should be nationalised. I do not anticipate, on any of the information I have to hand, that a due diligence will require the nationalisation of the two major banks. However, it will establish with far greater precision the precise nature of the exposures they have. This will allow the State to formulate a far more exact policy with regard to risk identification.