Michael Noonan (Limerick East, Fine Gael)
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Question 32: To ask the Minister for Finance if he will arrange to present full details of the worked costings of keeping Anglo Irish Bank as a going concern, compared to an orderly wind down of that bank. [24759/10]

Arthur Morgan (Louth, Sinn Fein)
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Question 46: To ask the Minister for Finance the cost to the Exchequer of the restructuring plan of Anglo Irish Bank to split into a good bank and a bad bank; the cost that will be incurred by the State if Anglo Irish Bank is split into a good bank and a bad bank in terms of the costs of nationalisation, recapitalisation and restructuring; the cost of a wind-down of the bank over ten years and over 20 years and of liquidating Anglo over a year; and if he will make a statement on the matter. [24530/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 32 and 46 together.

As I emphasised in my Banking Statement on 30 March, finding a long-term solution for Anglo Irish Bank is by far the biggest challenge in resolving the banking crisis. The sheer size of the bank means there are no easy or low cost options.

As set out in the statement the bank's new management and board have estimated, an immediate wind-up would lead to a fire-sale of assets resulting in a permanent additional and unnecessary loss of upwards of €30 billion. In addition, the State would have to provide a large sum of cash – in the order of €70 billion – up-front to meet the deposits, bondholders and the liabilities due to the Eurosystem.

This assessment carried out by the bank in the context of the preparation of its restructuring plan makes clear that a longer term wind-down is not in the taxpayers' interest. In addition to the capital losses that would be sustained, a long-term wind-down of the bank over ten years could expose the State to funding obligations approaching €30 billion.

The realisation of the costs involved under these scenarios and the wider disruption to the financial system would generate enormous instability for the State with unforeseeable but potentially long-lasting damage to the overall economy.

As the Deputies will be aware, the bank's revised restructuring plan prepared by its new senior management team was submitted to the European Commission at the end of May. Following a very comprehensive and detailed evaluation of strategic restructuring options, the bank has identified as its preferred option, in terms of minimizing the future cost to the taxpayer, to carve out a smaller and stronger bank, leaving the remainder in the form of an asset management and recovery company. It is envisaged that the new going concern entity would be prepared for sale in due course. This option holds out the prospect of reducing the impact on the taxpayer and yielding some value in the future when the bank is sold out of State hands.

The Chair and the CEO of the bank provided further details on the bank's restructuring plan and the various options presented in the plan at their appearance at the Finance and Public Service Committee yesterday. As the plan remains under consideration by the European Commission and in light of the commercial sensitivity of much of the information contained in the plan, it is not possible to present full details of the costs of maintaining the bank as a going concern as compared to the orderly wind down of the bank.

As I have consistently reiterated, the sums required to rescue the bank are enormous but the costs of winding it down are even greater. The current bank strategy of seeking to devise a way to realise value for the taxpayer out of the remains of the old bank means the State could at least get some return, in time, recouping some of its assistance.