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

It is a fair question, to which I will give a fair answer. In the first week of January we sold the contingent capital notes - the CoCos - in Bank of Ireland. We achieved fair value because we got back the €1 billion the taxpayer had put in and we got a little bit with it - €40 million or €50 million. That was good. If similar circumstances allowed me to sell either the other CoCos in AIB and PTSB or the preference shares, the sale of which is more problematic for other reasons, while getting back what the taxpayer had put in, I would sell them. I have made this publicly known in the markets and investors know it. They are available at a price but not below par value. I am not disposed to putting the equity in AIB and PTSB and the 15% stake in Bank of Ireland on the market now because I do not think we would achieve full value. As I said in reply to a separate question, I want to build up values in the banks. We are taking away the guarantee away and building up their values and cutting their cost bases. What the State holds is becoming more valuable. The primary purpose of the approach we are pursuing is to have normal and well performing banks that will provide credit lines for the economy. It is not essentially driven by a desire to enhance value. The enhancement of value is a consequence of the actions I am taking.

What is going on in Europe is the biggest project that has been undertaken since the currency was established. A single supervisory mechanism is being put in place. The resolution legislation will govern how Europe deals with banks that become insolvent. It will set out the interventions, bail-ins and bailouts which are appropriate and deal with whether shareholders and others should be burned. We have to consider how to protect depositors and provide for a pan-European insurance system. Three pieces of work have to be done initially. The ESM will be empowered to recapitalise banks directly, while at the same time fulfilling its primary function - to react as the only fund for intervention, like the funds used to bail out Ireland and Portugal. There is a huge piece of work to be done. We are moving it forward through the Irish Presidency as quickly as we can. I do not think we will have a fully functioning supervisory mechanism until 2014, after which this debate will harden. I do not want to get to a position so far away that I cannot predict the moves. I want to make sure I am positioned correctly to get the best possible deal for the taxpayer.

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