Michael Noonan (Limerick City, Fine Gael)

I reiterate the Government's position on the bondholders of Anglo Irish Bank and the Irish Nationwide Building Society, INBS. As indicated in my statement of 31 March, the position on bondholders in Anglo Irish Bank and the INBS - institutions in different circumstances from the remainder of the banking system - will be considered following the completion of the independent review of the capital requirements of the INBS and Anglo Irish Bank last month. While the Central Bank has concluded that no additional capital is required for these institutions, this does not remove the onus on the Government to consider all options to reduce the cost to the taxpayer of resolving these institutions. I will, therefore, in the autumn raise with the IMF and EU authorities the issue of burden sharing to allow for the imposition of losses on unguaranteed and unsecured senior bondholders in Anglo Irish Bank and the INBS. As I stated at the time of my visit to Washington, I discussed this issue with representatives of the IMF who indicated they fully understood the Government's position and would work with us to seek to resolve it. I did not, however, discuss this matter with the US Secretary of the Treasury, Mr Geithner.

Regarding discussions with the ECB and the EU, there have been no formal consultations on the matter in line with Government policy as I have already outlined. I propose to engage with the EU and IMF authorities in the autumn on these issues.

It is important to reiterate that, in light of the potential broader financial stability and contagion issues that might arise, the Government will not take any unilateral action on this matter. Rather we will continue to work closely with our external partners to explain our perspective and hear their views.

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