Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Question 19: To ask the Minister for Finance the position regarding negotiations on burden sharing; if there has been any serious consideration given to debt for equity swaps as a method of burden sharing; in the absence of burden sharing, his plans to ensure that the cost of the bank bailout does not fall on the taxpayer; and if he will make a statement on the matter. [5408/11]

Dara Calleary (Mayo, Fianna Fail)
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Question 27: To ask the Minister for Finance his position on burden sharing with bondholders in Irish Banks; and if he has decided not to make representations on this matter to the relevant authorities [5418/11]

Jonathan O'Brien (Cork North Central, Sinn Fein)
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Question 28: To ask the Minister for Finance the burden sharing arrangements being discussed; the discussions taking place at European level regarding burden sharing with bondholders; the extent to which his partners at European level are willing to allow for burden sharing; and if he will make a statement on the matter. [5406/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 19, 27 and 28 together. Government consideration of the approach to burden sharing will be further informed by the outcome of the important capital assessment exercise currently being undertaken by the Central Bank as well as international developments on burden sharing.

As Deputies will be aware, the prudential capital assessment review, PCAR, exercise to determine the capital needs of the Irish banks is being carried out by the Central Bank and will be concluded by the end of this month. While the work is at an advanced stage it is not yet complete. Deputies will appreciate that it is essential that the results of this exercise are, and are seen to be, the outcome of a detailed and rigorous process undertaken on a wholly independent basis by the Central Bank. I have no information available to me which would allow me to speculate about the eventual outcome of the PCAR nor would it be appropriate for me to speculate on what it might be because there is a significant degree of market sensitivity in this area.

The Government has made clear that based on the results of the PCAR it will then assess how the capital needs of the banks should be met to ensure that international market confidence in the Irish banking system can begin to be restored. In this context, a key priority of Government in line with the programme for Government is to maintain the creditworthiness of the State. Therefore, the overarching objective must be to ensure that all appropriate options for supporting debt sustainability are factored into the Government's decision making process.

Deputies will appreciate that at this juncture while we await the results of the PCAR it is not possible, nor would it be prudent, to debate in detail the options open to Government. Naturally, it is the case that the issue of appropriate burden sharing comprises one of a range of important issues we are discussing with our European partners. These discussions are sharply focused on ensuring that the implementation of the EU-IMF programme agreement - the objectives of which we are strongly committed to achieving - is fully consistent with ensuring that a sustainable path for our debt in the future and our return to market funding for the State and for the banks in due course.

While the debate at EU level is, for now, focused on the issue of debt restructuring in the context of sovereign debt, from an Irish perspective, given that sovereign and bank debt are so closely linked, the wider debate at international level on burden sharing of bank debt is of equal importance.

On bank debt, several international organisations including the EU Commission, the Financial Stability Board and the Basel Committee on Banking Supervision are currently investigating the potential for various forms of burden sharing or "bail-in" tools such as debt write-downs, debt for equity swaps and contingent capital. There is not yet a clear international consensus as to the specifics of how such tools should work in practice. The Government is giving close attention to this issue to ensure that the cost to the taxpayer of supporting the banking sector can be kept to an absolute minimum.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We have only six minutes left before concluding so perhaps the Deputies will share time.

Pearse Doherty (Donegal South West, Sinn Fein)
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I listened to Fine Gael Deputy Peter Mathews commending debt for equity swaps and he referenced an economist who made the suggestion some weeks ago. He may not have been listening to what Sinn Féin has been stating for a long time but debt for equity swaps are among the proposals that we have put forward. I hope the issue will be considered.

We are dealing with burden sharing and I seek a clear answer on the matter. This is an important issue for all of us, especially taxpayers. The Minister has referenced the fact that the stress tests will be known to us in the next week or so. We are unsure what the figure will be but we all estimate it will be in excess of €10 billion. The Taoiseach has committed that no more than €10 billion will go into those banks until burden sharing is on the table. We will not get burden sharing from the European Union tomorrow or, at least, I do not imagine it will be agreed to. Am I mistaken or is it not the case that, as announced by the Taoiseach last week, no more than €10 billion will be invested in the banks regardless of whether the stress tests call for €12 billion, €25 billion or €35 billion until burden sharing has been achieved in some form, be it debt for equity swaps, the European Central Bank taking equity in some of our banks or a direct hit on senior bondholders?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Burden sharing is established in respect of subordinated instruments. When the Minister refers to burden sharing, I take it that he is discussing unguaranteed debt in the banks rather than guaranteed debt or sovereign debt. I would like clarification on this issue.

Regarding the rather undifferentiated language about burning bondholders, does the Minister accept that our banking system is significantly dependent on attracting funding from abroad and that the constant extension of this debate is not of assistance to the banks in attracting funding?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I will allow Deputy Boyd Barrett to ask a quick supplementary question.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I asked a question that related to this subject but to which I did not receive a response. Can we know the names of the bondholders, including those we have already paid? I do not believe we should be paying them. Can the names of the bondholders be made available to the House and the public?

Michael Noonan (Limerick City, Fine Gael)
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Deputy Boyd Barrett's question was addressed in part of the answer, which was too lengthy to read out in full. However, he will receive it in written form. In general terms, the names of bondholders are not known to institutions issuing bonds because there is an active secondary market on which bonds are constantly bought and sold. If AIB issues a bond, it may know who buys it in the first instance, but it has no idea of who is holding it once it starts moving around. Unlike the case of a shareholding in a company, there is no requirement in law to have a share book disclosing who the bondholders are. My answer is "No", but it is expanded upon somewhat in the written answer provided.

Regarding Deputy Lenihan's question, sovereign debt is sacrosanct. Any country would be foolish not to honour a guarantee given under the signature of the sovereign state. When we discuss burden sharing, we are not discussing that category of debt. It must be excluded. We must pay our way.

Deputy Doherty is pressing me to give him information in advance of the results being published. I am not in a position to do so. I must wait for the results of the stress tests to become available before the Government can adopt a policy position on the issues the Deputy raised.

Pearse Doherty (Donegal South West, Sinn Fein)
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The Taoiseach has announced the policy position. Does the Minister for Finance agree with the Taoiseach's statement that the Government will not invest more in the banks than has already been committed to until burden sharing is on the table? The Taoiseach made this statement a number of times in the House in response to questions tabled by our party leader.

Michael Noonan (Limerick City, Fine Gael)
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I am advising the Deputy to be patient. It is not long until the end of March.

Pearse Doherty (Donegal South West, Sinn Fein)
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Will the Minister tell the House whether he agrees with the Taoiseach then? Written Answers follow Adjournment Debate.