Joan Burton (Dublin West, Labour)
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Question 214: To ask the Minister for Finance the discussions he has had with private equity interests, hedge funds, or groups or consortia including private equity or hedge funds proposing to take a stake in any of the banks covered by the guarantee; the consortia that have made approaches in this regard; the number of occasions; if he has met representatives of any of the listed groups; and if he will make a statement on the matter. [46976/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government's Guarantee Scheme has been successful in safeguarding the stability of the Irish banking sector and in restoring its liquidity position. However, international capital market expectations in relation to capital levels in the banking sector have altered.

In my statement on 28 November, I indicated that it would be appropriate for the State in certain circumstances, through the National Pensions Reserve Fund or otherwise, to consider supplementing private investment with State participation. Following on from this, the Government announced on 14 December its intention to support, alongside existing shareholders and private investors, a recapitalisation programme for credit institutions in Ireland of up to E10 billion. In that regard, the State is open to supporting proposals from potential investors that would add value to the security and stability of the financial system and would enhance its ability to contribute in a positive way to economic development.

I have met in recent weeks with a number of banks and investment businesses. I have indicated that it is a matter for the Board of each financial institution concerned to develop further their own plans for raising capital where appropriate. Following the Government's announcement of 14 December, relevant credit institutions are expected to develop detailed proposals and these institutions have been asked to submit their proposals by early January.

Any parties with serious propositions for investment in an institution are of course referred to the institutions concerned. Any proposals involving State participation or investment would be considered only following advice from the NTMA and from financial and legal advisors as appropriate.

It would not be appropriate for me to comment on any specific proposals or specific meetings with interested parties, as the details of any discussions are potentially market sensitive.

Joan Burton (Dublin West, Labour)
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Question 215: To ask the Minister for Finance his views on extending the bank guarantee scheme; if he has received representations or requests from any of the covered institutions for such extension; if his attention has been drawn to the fact that many of the institutions covered are suggesting that they may have difficulties in raising finance beyond the duration of the guarantee; and if he will make a statement on the matter. [46977/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have had no formal requests from any of the covered institutions to extend the Guarantee Scheme. However, I have been asked, in various discussions, as to the Government's intentions in this regard. The Guarantee Scheme is less than three months old and will run for two years. The operation of the Scheme will be kept under constant review.

Joan Burton (Dublin West, Labour)
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Question 216: To ask the Minister for Finance if he had further audit or other examination in respect of the institutions covered by the bank guarantee scheme with a view to examining their loan books, particularly in respect to bad debts incurred by the covered institutions from exposure to the property and construction sectors; if he has been advised of the appropriate levels of write-downs in the covered institutions; if he has requested any of the covered institutions to make appropriate write-downs in respect of losses that may be incurred from their loan books; and if he will make a statement on the matter. [46978/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Financial Regulator recently received reports, prepared by Price Waterhouse Coopers, on the financial and capital position of the institutions receiving support under the Credit Institutions (Financial Support) Scheme. These reports indicated that the capital position of each of the institutions reviewed was in excess of regulatory requirements as at 30 September 2008 and also concluded that, even in certain stress scenarios, the capital level will remain within regulatory requirements in the period to 2011.

As the Deputy would expect, continued vigilance is appropriate during the period of the Government guarantee and further work continues on the review of covered institutions' loan books. The outcome of this work will be considered by the Financial Regulator as part of the ongoing supervision of the covered institutions under the Scheme and more generally.

While the Price Waterhouse Coopers reports have provided an assurance on the capital position of the covered institutions, I also recognise that market expectations on appropriate capitalisation levels have changed and that it is also necessary to ensure that the banks are in a position to lend to business and personal customers in a sound financial position. It is for this reason that I announced a programme of capitalisation for credit institutions in Ireland.

The extent to which impaired loans have been provided for is a matter for each institution and its auditors to report on, in accordance with supervisory and accounting requirements, as the institutions publish results for the appropriate periods. The Financial Regulator will be in ongoing contact with the covered institutions on this matter having regard to the continuing work of Price Waterhouse Coopers and other information obtained within the regulatory framework.