Brian Cowen (Laois-Offaly, Fianna Fail)

The provisions to which Deputy Gilmore refers amending the bank guarantee scheme legislation, the Credit Institutions Financial Support Act 2008, in order to facilitate long-term debt issuance by the banks of up to five years, in accordance with the findings of a review of the guarantee, was signalled in the supplementary budget as far back as 7 April. There is no question of something unanticipated or unannounced suddenly arriving in the second Schedule of a Bill. This is being done to ensure that Irish banks have access to this longer-term funding in line with the mainstream approach in the European Union. It will contribute significantly to supporting the funding needs of the banks and to securing their continued stability.

It is true, as the Deputy stated, that the Irish Government was the first to bring forward a bank guarantee scheme. Many governments since have followed that example as part of their response to the need to provide financial stability at a time of unprecedented turbulence in the international banking system. There have been other and further measures such as the recapitalisation of the banks and the National Asset Management Agency Bill which is also being prepared.

This Bill is designed to ensure that Irish banks will have access to the issuance of eligible debt securities for the same length of time as other banks. We set out our bank debt guarantee for two years. In line with developments at EU level and the review in respect of the guarantee scheme it would put Ireland at a disadvantage were we to suggest that our bank guarantee was to extend only to September 2010 when debt securities of up to five years beyond that date are available to others. We would extend it to ensure that Irish banks can compete on a level playing pitch for those debt securities.

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