Martin Ferris (Kerry North, Sinn Fein)
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Question 19: To ask the Minister for Finance the monetary status of the National Pensions Reserve Fund; the expected impact of the National Asset Management Agency and other banking matters on this fund; and if he will make a statement on the matter. [44904/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The value of the Fund at 30 September 2009, the most recent value published by the National Pensions Reserve Fund (NPRF) Commission, was €20.9 billion.

In relation to this figure, it should be noted that the National Pensions Reserve Fund Act 2000 was amended by the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009. The amendments in the 2009 Act allow the Minister for Finance to give a direction to the NPRF Commission to invest in a listed credit institution and to make payments into the Fund for the purposes of such an investment, such additional contributions to be offset against the contribution liability in future years. These amendments reflected the Government decision, announced on 11 February 2009, that the recapitalisation of Allied Irish Bank and Bank of Ireland through the purchase of preference shares by the NPRF would be funded by €4 billion from the Fund's own resources and €3 billion from the Exchequer through the frontloading of the 2009 and 2010 Exchequer contributions to the Fund.

The legislation establishing the National Asset Management Agency (NAMA) recently passed through all stages in the Oireachtas. This body is being established on a statutory basis to deal with the negative impact on the economy resulting from deficiencies in the asset quality in the banking system. NAMA will work by facilitating the speedy removal of higher risk property-related assets which are hampering the banks' ability to lend to credit-worthy individuals and households and thereby support economic activity. NAMA will purchase debt from the banks by issuing bonds. The funding arrangement for NAMA, as set out in legislation, does not involve the NPRF.

I am aware that some institutions will require additional capital in order to absorb the losses arising from the transfer of their impaired loans to NAMA and in order to maintain appropriate levels of capital. I have repeatedly made it clear that the Government's strong preference is that private market solutions are found and implemented by the institutions. To the extent that sufficient capital cannot be raised independently or generated internally, the Government remains committed to providing such institutions with an appropriate level of capital to continue to meet their requirements. This will be done in a manner consistent with EU State Aid rules and the credit needs of the Irish economy. The source of such funding will be dealt with as the need arises. Furthermore, any recapitalisation of a credit institution in such circumstances must be followed by restructuring in a manner which complies with EU State Aid requirements.

The NPRF Commission publishes annual reports as a statutory obligation and quarterly reports providing an update on the Fund's performance. Both the annual reports and the quarterly reports are available on the Commission's website www.nprf.ie