Bernard Durkan (Kildare North, Fine Gael)
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Question 112: To ask the Minister for Finance the extent to which he has taken initiatives through the EU Commission or the European Central Bank prior to action to protect the financial institutions throughout Europe; and if he will make a statement on the matter. [39155/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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From the outset of the financial market difficulties in August 2007 EU Finance Ministers have taken a number of steps to address the difficulties in financial markets and Ireland has of course been a full participant in that work.

In October 2007 Finance Ministers agreed on a set of common principles and a roadmap of further actions to enhance financial stability arrangements and the ability of authorities to respond to serious disturbances in financial markets. This programme involves reviewing along with the EU's international partners how to further improve transparency of complex financial instruments, valuation standards, the prudential framework, risk management and supervision and market functioning including the role of rating agencies. Arising from this work, EU Finance Ministers and Central Bank Governors agreed an extended Memorandum of Understanding on financial stability contingency planning between financial supervisors, central banks and finance ministries that incorporates common principles and practical guidelines for cross-border cooperation. This came into effect in June 2008.

At their meeting on 7th October 2008 EU Finance Ministers agreed common principles to guide the actions of Member States aimed at preserving confidence and stability in financial markets. The Finance Ministers welcomed the EU Commission's continued commitment to act quickly and apply flexibility in state aid decisions within the framework of the single market and state aid regime. The Commission has issued guidance for Member States on how decisions within this framework can be rapidly assessed.

The prompt actions by international central banks, including the European Central Bank, to provide major injections of liquidity have contributed to greater stability in financial markets internationally, though markets continue to remain subject to significant uncertainties. The ability of Irish banks to access liquidity from the European Central Bank has been a major benefit and provided a significant strength in assisting the Irish financial system to withstand difficult financial conditions over the last year.