Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 159: To ask the Minister for Finance the measures he is taking to ensure that the guarantee scheme for credit institutions is not operated by covered institutions in a way that will cause competitive distortions in the banking market here or lead to abusive trading practices by such institutions; the mechanisms and commitments he has in place to ensure such behaviour does not occur; the way and when these measures will be implemented; and if he will make a statement on the matter. [43504/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As I have emphasised on several occasions, the Scheme imposes very strict conditions to ensure that balance sheet growth is measured and in accordance with prudent banking practice, that risk is properly measured and managed and that the interest of taxpayers are safeguarded. The Scheme itself refers to several particular objectives, including "preventing abuse of the guarantee" and "ensuring compliance with the requirements of EU State aid and competition law". There are several sections of the Scheme that ensure compliance with its overall objectives.

For instance each covered institution is required to comply with the Irish Banking Federation Code of Practice on Mortgage Arrears and the Financial Regulator's Consumer Protection Code. Furthermore, Paragraph 36 states that the Financial Regulator in consultation with me may regulate the commercial conduct of covered institutions strictly in order to achieve the objectives of the Scheme and impose conditions regulating the commercial conduct of a covered institution's business, in order to minimise any potential competitive distortion that may otherwise arise and to avoid any abuse of the guarantee or any use in a manner irreconcilable with the purpose of the guarantee. My Department and the Financial Regulator are monitoring the operation of the Scheme.