Noel Ahern (Dublin North West, Fianna Fail)
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Question 86: To ask the Minister for Finance the new rules laid down by the Financial Regulator in relation to the new capital requirements of financial institutions; if he will refer to recent media reports that banks can get around their regulations or ratios by the setting up of special purpose vehicles, which allow banks to borrow up to €34 billion extra; if he will outline the factual position; and if he will make a statement on the matter. [30921/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Financial Regulator that it has not laid down new rules regarding capital requirements for credit institutions. However, in common with other jurisdictions, the Financial Regulator performed a stress test exercise in the first quarter of 2010 in respect of certain credit institutions covered by the Government guarantee. The results of this exercise were published as the Prudential Capital Assessment Review (PCAR) on 31 March 2010. PCAR set new target capital requirements and required this capital to be in place by the end of 2010.

The Capital Requirements Directive, as originally implemented in Ireland by S.I. 660 and 661 of 2006, sets out the minimum capital requirements of all credit institutions authorised in Ireland, including the requirements for credit institutions to maintain minimum capital requirements on a consolidated basis. These have not changed. I am not aware of the media reports referred to by the Deputy and am not in a position to comment on the claim in relation to special purpose vehicles in the absence of further information.