Brian Cowen (Laois-Offaly, Fianna Fail)

On the other question regarding the capitalisation of the bank, we are seeking to ensure there is additional credit over and above what was provided last year for business. We made that point in the policy statement we issued in December, calling for a greater amount of money to be made available for first-time buyers and people who wish to take out mortgage commitments. This has been part of the ongoing discussions.

On the question of the recapitalisation itself, the Deputy makes the point that he felt a recapitalisation should have taken place sooner. It is because of the prudent approach and the advice we are taking, and the work that has been undertaken based on various stress tests and scenarios which are prudent and proper in assessing the capital needs of the banks going forward, that we will find in what way we can contribute to stability and what sort of figure would be regarded as sufficient in those circumstances, as matters stand.

We have been conducting this with the best of advice to the Department of Finance. The figures that would be coming forward if the Government makes a decision later this afternoon are not plucked from the air. They are based on an assessment as to what is required in the interests of the stabilisation of the banking system and its ability to work through its provisions.

I spoke yesterday, and the suggestion is made in comment today in various newspapers, about predictions on the performance of various assets. Once assets are diagnosed as bad debts, they are provided for in the accounts. The stress testing and the various scenarios that are worked out by those who advise on this matter to Government and to the Department are such that we are devising the amount of money that would be required in the interests of the wider economy, of jobs, of ordinary people conducting their business on a daily basis and of having a functioning banking system with which to do that. That is the whole purpose, and no other, behind why we are conducting this policy and why we are bringing ourselves to the position where a decision can now be taken by the Government on these matters.

There will be ongoing monitoring and evaluation of the situation to see in what way risk is managed into the future. There is no means by which we would put this behind us and suggest that is the end of the matter. We are approaching in a prudent, cautious and comprehensive way the maintenance of stability in the banking system, first, through the guarantee system, which is being paid for, and, second, by a capitalisation programme, which is being paid for by a coupon and in which greater interest will be available to the Government than what is available at present for the money that is being provided. This will ensure the Government also gets the upside in the event of shares returning to more normal trends in the years ahead.

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