Brian Lenihan Jnr (Dublin West, Fianna Fail)

The State could fund itself in any event for the earlier half of next year and could return to the markets during their programme, were there sufficient market confidence, and raise funds for itself. That is the contingent character of the State funds. Moreover, the type of funds that may be required are clearly known from the size of Ireland's Exchequer deficit and projected Exchequer deficits, which will be clear in the plan to be published tomorrow.

As for the issue of the banking sector, the position is that the contingent character of the fund arises because, as the Governor pointed out last week, there is a need to demonstrate convincing firepower behind the banking system. However, the purpose of displaying that firepower, and I wish to take up an issue raised by Deputy Noonan in the debate, is not to provide liquidity funding or cash funding for the banks but to provide potential capital that can be drawn down to give them confidence. The funding cash requirements of the banks are met by the European Central Bank. This is so important in the context of the queries that we receive about deposits. Deposits are not simply guaranteed by the Government but are met by the cash support that the entire banking system obtains as part of the euro system from the European Central Bank.

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