Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 115: To ask the Minister for Finance in view of annual results of Anglo Irish Bank, which stated that the Irish Central Bank had a master loan repurchase agreement with the bank worth €11.5 billion if he will outline lending assets which this loan was secured upon; if they are development land or investment properties; when the facility was approved by the Central Bank; if the collateral extended on the loan differs to the collateral accepted by the European Central Bank; if the facility was approved by him and when; the current exposure for the Irish Central Bank from the MLRA: his plans, if any, to write off part or all of the principal; the measures which have been put in place to ensure repayment in full; the way the facility has been accounted for in the financial accounts of the Central Bank; if consideration has been given to the treatment of the loan should Anglo Irish Bank be split; and if he will make a statement on the matter. [30318/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware arrangements in relation to exceptional liquidity assistance (ELA) are generally between the Central Bank and financial institutions concerned. However, the Central Bank has informed me that similar to other central banks, the Central Bank of Ireland can supply ELA to institutions when that is judged necessary. This facility is not part of regular monetary policy operations. The Bank does not comment on operations undertaken with individual institutions. ELA is only extended where it is collateralised. Because of the nature of this Special Liquidity Facility i.e. it is not part of regular Eurosystem monetary policy operations; it is recorded under the "Other Assets" category in the Balance Sheet of the Central Bank.

The Report and Accounts of Anglo Irish Bank for the financial period ending 31 December 2009 referred to a short term liquidity facility arranged through the Central Bank of Ireland in 2009 that amounted to €11.5bn at 31 December 2009. The Notes to the accounts (Note 37) state that the necessary collateral is derived from the Bank's customer lending assets. Further, Note 27 of the accounts, under the heading of 'Loans assigned as collateral', outlines that loans with a carrying value of €12.49bn have been assigned as collateral under a Master Loan Repurchase Agreement with the Central Bank and Financial Services Authority of Ireland. The Bank does not report on the split between development and investment loans. However, Note 27 of the relevant accounts does provide further disclosure in relation to the composition if the Bank's loan book.

The European Central Bank could accept similar collateral, but not the same collateral, once the loans were suitably structured in an eligible security. Further, there are no plans to write off any part of the principle involved and the amount outstanding under this facility is likely to be reduced by the receipt by NAMA bonds following the transfer of assets to NAMA and by other funding flows in the course of this year. In addition, I do expect that the bank's longer term funding requirements will be addressed in the context of the EU Commission decision on the revised business plan submitted at the end of May and which is due in July or August.