Brian Lenihan Jnr (Dublin West, Fianna Fail)

Deputy O'Donnell insists on using the expression "toxic debt". Toxic debt in banking discussion generally relates to the kind of paper instruments which were generated in the United States and were common in the United Kingdom banking sector — derivative instruments and the like. They do not exist to any substantial extent and, in fact, exist to a minimal extent in the Irish banking sector. As I pointed out in my reply, the exposures of the Irish banks relate to property, which is not a toxic asset and has a residual value. It is important the Deputies understand this. It is accepted by most international analysts and by those who examine these questions.

The continued use of the phrase "toxic", while popular from a political point of view, does not characterise the nature of what we are dealing with here. We are dealing with substantial exposures to property loans where moneys were advanced in the context of falling asset prices. The various options being canvassed at the NTMA and analysed by Dr. Bacon are being analysed in that context. No final decision has been made by the Government on this matter and, as I indicated in my reply, any final decision will take into account and be based on the best interests of the taxpayer and the economy.

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