Brian O'Shea (Waterford, Labour)
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Question 57: To ask the Minister for Finance the extent to which the Irish banking system is dependent on the European Central Bank for funding; if the ECB have communicated to him a proposed timescale or mechanism for scaling down its commitments to the Irish banking system; if ECB support for the Irish banking system is to be phased out over the course of 2011; and if he will make a statement on the matter. [41636/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have no function in regard to the level of ECB lending as this is a matter for the ECB and the associated national central banks. Given the independence of the Eurosystem it would not be appropriate for me to comment on specific institutions, or indeed on the policy or approach of the ECB to the provision of liquidity support to banks in the Eurozone. The Government remains committed to supporting the banking system's access to market funding, which would serve to reduce the requirement for ECB liquidity support. As the Deputy is aware, the Eligible Liabilities Guarantee Scheme has been an important support to the Irish banking system, facilitating its access to both short and longer term funding to help maintain the overall stability of the banking sector. It complements the broad Government Strategy to restore fully the banking system and maximise its contribution to overall economic recovery.

The Deputy should note that the European Commission today announced the approval of the extension of the Scheme under State aid rules to 30 June 2011 which is the maximum period permitted for state aid approval under the European Commission policy on guarantee schemes. In addition, the ECB, in its legal opinion of 2 November 2010, has endorsed this extension to the Scheme on financial stability grounds.