Tommy Broughan (Dublin North East, Labour)
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Question 87: To ask the Minister for Finance the way he will protect the public interest and investment under the proposed bailout fund for six financial institutions; his views on nationalising one or more of the key financial system banks he referred to in a recent interview to protect and advance the public interest; and when significant management changes will be made to address perceived weaknesses in the recent banking near-collapse. [47328/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In my statement at 14th December 2008, I announced the Government's decision to support, alongside existing shareholders and private investors, a recapitalisation programme for credit institutions in Ireland of up to €10 billion. This will be done through the National Pension Reserve Fund or otherwise and subject to terms and conditions.

I also announced that in order to safeguard the interests of the taxpayer, State investment will be assessed on a case by case basis in an objective and non-discriminatory manner, having regard to the systemic importance of the institution, the importance of maintaining the stability of the financial system in the state and each credit institution's particular requirement for capital.

My priority is to ensure the long-term sustainability of the banking sector in Ireland and to underpin its contribution through the availability of credit to individuals and businesses in the real economy. I am closely monitoring each of the covered institutions and state investment, as mentioned previously, will be assessed on a case by case basis.

Recapitalised institutions may be required to comply with such requirements as to transparency and commercial conduct as the Minister sees fit.

Tommy Broughan (Dublin North East, Labour)
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Question 88: To ask the Minister for Finance the reason a company (details supplied) was included in the banks bailout scheme in view of the mutual nature of the society and its reported exposure by management to very small amounts of construction commercial bad debt; and if he will make a statement on the matter. [47329/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Under the terms of the Scheme support may be provided to a specific institution, if it is necessary and in the public interest for maintaining the financial stability of the financial system in the State. I am of the opinion, having consulted with the Governor of the Central bank and the Financial Regulator that the specified institution qualifies for cover under the Scheme on this basis.

Tommy Broughan (Dublin North East, Labour)
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Question 89: To ask the Minister for Finance the key elements of the proposed bailout fund for six financial institutions; the terms on which the fund will operate and disburse necessary funding; and the financial status of each institution which will trigger or justify a response from the new fund. [47330/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government's approach to the recapitalisation of credit institutions is designed to ensure the long-term sustainability of the banking sector in Ireland and to underpin its contribution through the availability of credit to individuals and businesses in the real economy.

The Government has decided to support, alongside existing shareholders and private investors, a recapitalisation programme for credit institutions in Ireland of up to €10 billion. This will be done through preference shares and/or ordinary shares and will be subject to terms and conditions. The State may, where appropriate, participate on an underwriting basis. In principle existing shareholders will be expected to have the right to subscribe for new capital on the same terms as the Government. A key principle in the operation of such a fund will be to secure the interests of the taxpayers through an appropriate return on, and appropriate terms for, the investment.

As the next step in the process I am initiating detailed engagement with the credit institutions themselves in respect of specific proposals. In order to safeguard fully the interests of the taxpayer, State investment will be assessed on a case-by-case basis in an objective and non-discriminatory manner, having regard to the systemic importance of the institution, the importance of maintaining the stability of the financial system in the State, and the most effective and economical use of resources available to the State, as well as each credit institution's particular requirement for capital.

The terms for disbursement of funds will be set, in this context, having regard to the particular position of individual credit institutions, to ensure that all State funds are deployed to optimal effect. Recapitalised institutions may be required to comply with such requirements as to transparency and commercial conduct as the Minister sees fit. Any State investment will be undertaken in line with best practice in the EU and elsewhere, consistent with EU State aid rules and in particular the recent European Commission communication on recapitalisation.

Joan Burton (Dublin West, Labour)
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Question 90: To ask the Minister for Finance if his attention has been drawn to reports that senior bankers at a bank (details supplied) are in line to receive bonuses for 2008 up to 80% of the 2007 bonus; his views on whether such practices are inappropriate at a financial institution benefiting from a blanket guarantee from the taxpayer; and if he will make a statement on the matter. [47337/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Scheme prepared under the Credit Institutions (Financial Support) Act 2008 requires each covered institution to prepare a plan to structure the remuneration packages of directors and executives, including total salary, bonuses, pension payments and any other benefits, so as to take account of the objectives of the Act.

I have recently established the independent, three member, committee CIROC (the Covered Institutions Remuneration Oversight Committee), as provided under the Scheme which will oversee all remuneration plans of senior executives of the covered institutions. Each covered institution has submitted its report to CIROC, which will then report to me within three months.

It is important to emphasise that one of the key features of this part of the Scheme is the requirement to orient the system of bonuses to create the appropriate incentives, incentives that point toward reduction in excessive risk-taking and that promote long-term sustainability.

The Scheme does not cover remuneration packages payable for periods before the coming into force of the Act.

It is important to note that the CIROC will have to develop its own views prior to reporting to me in March.

Joan Burton (Dublin West, Labour)
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Question 91: To ask the Minister for Finance the way the public interest directors at banks covered by the bank guarantee scheme will be remunerated; the amount of this remuneration; the person who will make the payment; and if he will make a statement on the matter. [47338/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As is stated in paragraph 32 of the Credit Institutions (Financial Support) Scheme, the non-executive directors appointed in the public interest by the covered institutions are to be remunerated by those covered institutions. The amount of this remuneration is a matter for the institutions themselves. However, the Deputy should note that paragraph 47 of the Scheme clearly states that "each covered institution shall prepare a plan to structure the remuneration packages of directors and executives so as to take account of the objectives of the Act of 2008". This will form part of the work programme of the Covered Institution Remuneration Oversight Committee (CIROC), which I recently established.

Joan Burton (Dublin West, Labour)
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Question 92: To ask the Minister for Finance if the public interest directors at banks covered by the bank guarantee scheme will undergo specialised training for that role; and if he will make a statement on the matter. [47339/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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My Department recently held generic briefing sessions on the Scheme in general and the fiduciary duties of non-executive directors for individuals on the panel from which the covered institutions are to appoint directors in the public interest.

Joan Burton (Dublin West, Labour)
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Question 93: To ask the Minister for Finance the way public interest directors at banks covered by the bank guarantee scheme are to report back to him; and if he will make a statement on the matter. [47340/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Any director appointed in the public interest by the covered institutions will be subject to the provisions of company law. As such, he or she will be bound to act in the interests of the separate legal entity that is the company. Therefore, directors appointed in the public interest will not have a reporting relationship to me or to my Department. However, the panel comprises people who, in addition to their other experiences, can bring a civic mindedness and a sense of where the public interest lies to inform their view of what is in the company's interests.