Bernard Durkan (Kildare North, Fine Gael)
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Question 135: To ask the Minister for Finance if he is satisfied that action taken to date to support and reorganise the banking system is adequate to meet requirements; and if he will make a statement on the matter. [45557/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The objective of the Credit Institutions (Financial Support) Scheme is to maintain financial stability in the best interests of the public and the economy of the State.

I have met with the CEOs of the six major financial institutions covered by the Guarantee Scheme on a number of occasions. My focus in those meetings has been to secure a stable and active banking sector which services the needs of the Irish economy. I am satisfied that the discussions have been productive.

I announced on the 28th of November that in certain circumstances it would be appropriate for the State to consider supplementing private investment in the banks. Discussions on this are ongoing.

Furthermore, as the Deputy will be aware, I have asked those institutions covered by the Government's Guarantee Scheme to consider the contribution that they can make to the economy through appropriate credit initiatives in relation to small and medium sized businesses and otherwise. I have, therefore, welcomed the fact that certain institutions are already considering or have announced initiatives in this regard.

The Scheme also provides that each of the covered institutions conducts its affairs in a manner that progressively reduces the risk to the Exchequer under its guarantee, for example, by putting in place improved structures to ensure the long-term stability of funding.

I understand that the Financial Regulator is instigating a series of new regulatory measures to take account of the new environment and to deal with the challenges it faces. These measures include, establishing a new unit within the Banking Supervision Department which will be dedicated to the supervision of the institutions covered by the Scheme, transferring existing resources and expertise and recruiting additional staff with banking experience into the Unit, which will be headed by an experienced Head of Function. The Regulatory Authority has requested and received detailed business plans from six of the covered institutions and has commenced a series of engagements with the institutions at the most senior level in order to determine the soundness of the plans.