Brian Lenihan Jnr (Dublin West, Fianna Fail)

There is no relationship between this Bill and the proposal that will be contained in next week's measure because this Bill relates to deposit protection. The issue that will be debated in the House next week is the question of medium-term debt and guarantees to the banks of medium-term debt. As the Deputy is aware, the present position is that the guarantee will lapse on 29 September 2010. Clearly, unless the banks are in a position to have their medium-term financing needs guaranteed beyond that date, they will have serious funding difficulties as a funding gap would arise in their arrangements.

Members can discuss the details of that legislation next week. I announced the principle underlying that Bill in my budget speech. It will not apply to dated subordinated debt or to securities of that character. It will relate to medium-term financing for the banks and this is a measure that has been taken in every other European country since Ireland's guarantee was made. In effect, when the Government gave its guarantee, it was a blanket guarantee to a designated date. One difficulty with so doing is that as and from the designated date, the banks have no guarantee whatsoever. Consequently, since then other European institutions have introduced more selective guarantees that in effect guarantee medium-term financing needs beyond that date. It is important that our banks are not put into an uncompetitive position vis-À-vis other European institutions. While that is the purpose of next week's legislation, I do not wish to anticipate it too much today as it has nothing to do with this Bill.

See this speech in context