Brian Lenihan Jnr (Dublin West, Fianna Fail)

I welcome the Minister. It is not a precedent or innovation for the Minister to address the House in the wake of stress tests. Last year, on the publication of the stress tests by the Governor and the Regulator I brought the response of the Government directly to the House. The Minister, I am glad to say, as I requested last Thursday, has kept with that precedent and outlined the Government's response to the stress tests.

I do not want to be contentious today. The Minister opened his speech with a rhetorical flourish touching on matters that do not have a direct bearing but he concluded as an orthodox Minister for Finance by saying that he wanted to be clear too for the benefit of our people and of market participants that we are committed to the EU and IMF programme. That is the position of the Government and the Minister for Finance.

Part of the programme was to carry out these stress tests. It is worth recalling that they have been carried out on behalf of the Central Bank, as they were last year by a firm. It is also worth noting what was stated last year by the Governor of the Central Bank and the Regulator at the time in regard to the stress tests then conducted. They were conducted at the exact same time last year and a press release was issued on 30 March 2010 by the Governor of the Central Bank. He said:

After a period of great uncertainty, these actions and announcements create a secure platform on which confidence will be built. While the costs that are today revealed are certainly significant, they are manageable and affordable for the Irish State. They are certainly a necessary measure to put the banking crisis behind us and provide for a stronger economy

On the same date the head of regulation said:

It is important that our banks move to a strong capital position as soon as possible and that we draw a line under the Irish banking crisis. Sufficient capital is an essential ingredient to ensure that banks can withstand future losses. We have applied a robust, realistic and prudent capital standard informed by our own detailed analysis and by emerging best practice internationally.

Subsequent stress tests were carried out on Bank of Ireland and AIB during the summer which did not excite much attention. They were more relaxed in character than the original stress tests and apparently were those applied on a Europe wide basis to various banks.

It is worth recalling what the Governor and Regulator said on that occasion because I am not sure the Minister will reply to this debate. I hope for his sake that the stress tests that have been announced today stand up by 30 March 2012. That is very important for the State and its financial stability. The stress test announced today by the Minister, entailing a requirement on the State to put a further €23 billion into the banking system——

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