Joan Burton (Dublin West, Labour)
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Question 98: To ask the Minister for Finance if his attention has been drawn to the fact that outstanding Irish bank loans to property developers within Ireland only, were estimated to be €86.7 billion in June 2008 and that expert commentators estimate that the banks are expected to be forced to write off up to €45 billion of these loans over the next two years; if there is a proposal within his Department to inject capital into the system if required in order to ensure that the bank guarantee is not called in; if he has set a limit on the amount of capital that the State would be prepared to inject into the banking system in such a scenario; and if he will make a statement on the matter. [39049/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I do not wish to comment on speculative comments by various commentators but as it happens most serious commentators — and the institutions themselves — expect provisions required to be a much smaller figure than that suggested by the Deputy.

It is a matter for each institution and its auditors to publish results at the appropriate periods. The banks will be releasing accounts and information over the coming months. The Financial Regulator clearly takes a direct interest in this issue, with a view to ensuring financial stability. I understand that the Regulator is engaged in an exercise at present to review the loan books and business plans of the guaranteed institutions.

As regards the capital position of the banks, each institution must take appropriate steps to ensure that their levels of capital are aligned with their needs. The State has a keen interest in the stability of the banking institutions, because of their role in the economy. Clearly, my Department, the Central Bank and the Financial Regulator will be in continuing contact with the institutions on their business plans, their capital position and their liquidity. Under the guarantee scheme, institutions can be required to adjust their capital ratios if that is required for the maintenance of financial stability.