Brian Lenihan Jnr (Dublin West, Fianna Fail)

I thank the Deputy for his questions. With regard to confidence in the regulatory system and his concern that it will be left to the system itself to address this matter, I can assure him it will not be left thereto. From the time of the departure of the chief executive of the regulatory authority, I made clear that I intended to bring proposals to the Government on the reform of the regulatory system. I will take responsibility for those proposals on the advice of my officials. I do not propose to subcontract responsibility to any consultancy or other group. I will hear the views of the regulatory authority and the Central Bank. Yesterday I received a detailed joint submission from those two bodies and it is now under consideration on the part of my officials. I intend to introduce definitive proposals on the reform of the regulatory system.

While I do not believe there should be any subcontracting of responsibility to a consultancy, I believe it would be in the interest of the country, in view of the damage caused to its international reputation by the activities at Anglo Irish Bank, to have some external validation of what we are proposing and of the interview process that must take place for the recruitment of a replacement regulator.

The Deputy asked a number of other important questions. On the question of the coupon attaching to the preference shares, the rate stands at 8%. Under the terms of the arrangement, were a bank not to pay the 8%, the value of the coupon would be translated into ordinary shares in the relevant State-owned institution, be it Bank of Ireland or Allied Irish Bank.

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