Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

As the Deputy is aware, and while recent media reports may suggest the identity of particular bondholders, the bank or Government has no substantive means of establishing the underlying ownership of these securities, which are freely tradeable once issued. These securities are publicly traded and dealt through market participants and settled by clearing house systems. An issuer does not have any access to the records of the clearing house. On maturity, the bank will instruct its paying agent to transfer the funds due to the clearing house, which will then distribute the funds to the holders of the securities as per their records. Even where the bank is presented with lists alleging to represent names of bondholders, I am informed there is no way for the bank or anyone else to completely verify the accuracy of such lists.

The Deputy will also be aware that when this Government took office it attempted to enforce burden sharing with senior unguaranteed bondholders in particular institutions that were no longer core elements of the Irish financial system. Intensive discussions were held with our European partners, in particular former President of the ECB, Mr. Trichet, in the run-up to the announcement of our stress tests on 31 March last year. Mr. Trichet believed at that time that such action was not in the interests of Ireland or the euro area. This matter was discussed again with former President Trichet on a number of occasions, including the ECOFIN meeting in Poland in September 2011.

I would also like to point out the differences between AIB and other non-core institutions currently in wind-down. The Deputy will be aware that AIB is a solvent, well capitalised Bank with an important mandate to supply credit and essential banking services to Irish Individuals, SMEs and businesses across the country. It is, therefore, important that its business model remains intact so that it can eventually regain access to international funding markets in a meaningful way and eliminate its dependence on the Government. This will also have the effect of enhancing its value for the State at a time of divestment. I note the bank’s successful re-entry to the public bond markets since the crises began, where it raised £395 million in May of this year, using UK residential mortgages as collateral. Nevertheless, I would like to again reiterate that the Government is currently in discussions with our European colleagues in regard to securing a deal on the Irish bank debt and further detailed work will be stepped up to ensure that the positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer.

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