Jack Wall (Kildare South, Labour)
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Question 100: To ask the Minister for Finance his views on reports that in excess of €70 billion worth of customer deposits fled from the domestic credit institutions over the course of 2010; the amount of deposits that fled from those domestic credit institutions subject to the deposit guarantee scheme over the course of 2010; and if he will make a statement on the matter. [1384/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It has been clear for some time that our banks were facing serious challenges in terms of their liquidity position. Lingering concerns in the market regarding their capital position has led to negative market sentiment. In addition unfavourable, and in some cases, irresponsible media reports have contributed to this negative sentiment. The Deputy will be aware that the Central Bank of Ireland collects data from the resident offices of all credit institutions, and publishes an aggregate balance sheet for all institutions and for the domestic group. The domestic group comprises 21 Credit Institutions (including the institutions subject to the Deposit Guarantee Scheme) and the Credit Unions.

For the domestic group there was a fall in resident deposits of €13.6 billion; and non-resident deposits fell by €55.9 billion, totalling €69.5 billion.

The Financial Programme with the European Commission/ECB/IMF does not propose any departure from existing policy, indeed its prescription is an intensification and acceleration of the restructuring process already being undertaken by the Irish banks. A key objective of the Programme is to ensure that the size of the domestic banking system is proportionate to the size of the economy and is appropriately aligned with the funding capacity of the banks overall, taking into account stable sources of deposit and wholesale funding.

It is important to point out that under the ELG Scheme in place until end 2011, deposit balances in the covered institutions continue to be guaranteed. The permanent Deposit Guarantee Scheme is in place for retail deposits up to €100,000. Since the signing of the agreement with the European Commission/ECB/IMF in December 2010, significant work is underway by the relevant authorities to complete the Prudential Capital Assessment Review (PCAR) and the Prudential Liquidity Assessment Plan (PLAR), these being two important components of the agreement, to be completed by end March.

The completion of these projects will bring additional confidence to the Irish Banking system.

The Government is determined to rebuild consumer and investor confidence in our financial system. Under the terms of the Programme agreement, and as I have already mentioned, the restoration of normal market funding of our banking system is a central objective of the Programme overall.