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

I am not neutral on the method the banks may use to achieve payroll savings. We are talking about a reduction of between 6% and 10% in the cost base of each institution. The Deputy will recall that Mercer did an evaluation of the three institutions concerned, which we published. Arising from that, the Government decided that the cost bases of the banks were still too high. They are all suffering losses and they need to reduce their cost bases.

They have submitted an initial response to my letter, laying out in primary colours what their plans are. I have to be satisfied with the work out of that. We are all living in the real world; there is an industrial relations process. The banks are unionised and represented, and we have to respect the negotiation process. Some things that are being proposed will, I presume, be acceptable and others will not. They will work their way through the process. In the final analysis, my officials will advise me as to whether what is happening is adequate. The arrangement will not be put in place unless I sign off on the agreement on behalf of the taxpayer.

My weight in respect of AIB and PTSB is more than that in respect of Bank of Ireland, in which the State is a 15% shareholder. The purpose of the savings is to cut the cost bases of the banks in order that they become profitable again. Profitable banks are a great advantage to people who do business with them, in terms of the availability of credit, the service they can give and the cost of what happens.

It is within all this range of activity that I would see customers of the banks benefiting in due course. One point on which we can be absolutely certain, however, is that banks which continue to lose money in present circumstances are not doing any favours to their customers.

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