Brian Lenihan Jnr (Dublin West, Fianna Fail)

The Central Bank has identified that the capital needs for Anglo Irish Bank in the proposed restructured state will be €29.3 billion. There will be some reduction in the figure taking into account the contribution to be derived by burden sharing by the holders of subordinated debt. However, we are also conscious that we must agree the final restructuring plan with the European Commission and the figures underpin that. The figure of €34 billion mentioned by the Central Bank refers to an extreme stress scenario and is based on an even more conservative assumption then in the stress cases used for other banks. The central case scenario of €29 billion is the appropriate forecast on the final cost of Anglo Irish Bank. Given the amount of work done by NAMA, Anglo Irish Bank, the National Treasury Management Agency, the Central Bank and the Financial Regulator and the dialogue between these institutions throughout the month of September, this will be the central core case scenario for Anglo Irish Bank.

Given the smaller scale of the institution, I am satisfied the figure for Irish Nationwide Building Society is a final figure. Deputy Broughan asked about the mutual model with regard to EBS. The mutual model failed here and the mechanisms in place, whereby depositors own the society, did not succeed in the sense that the management of the two Irish societies engaged in transactions that, in one case, were wholly discreditable and, in the other, were reckless. The relevant parties at EBS, responsible for the reckless lending, faced up to their responsibilities and resigned some time ago. Those at Irish Nationwide may face certain consequences, which the board must pursue.

See this speech in context