Terence Flanagan (Dublin North East, Fine Gael)
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Question 102: To ask the Minister for Finance his views on the bailout made to a bank (details supplied); his further views on the personal debt situation in this country and the fact that this bank is the first Irish bank to require a bailout due to personal rather than developer debt; and if he will make a statement on the matter. [6859/11]

Michael Noonan (Limerick City, Fine Gael)
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I stated in my announcement of 31 March 2011, to the Dáil on banking matters, that the banking system must be the enabler of economic recovery by restoring public and market confidence in its financial health, management competence and ethical integrity. The Prudential Capital Assessment Review (PCAR) and Prudential Liquidity Assessment Review (PLAR) examinations undertaken by the Central Bank, which are a component part of the EU-IMF Programme, are designed to restore market confidence to Ireland and, in particular, to the State's finances and our banks. As a result, the present exercise is on an exceptionally intensive and elaborate basis and is designed to respond to market scepticism about our banks.

Under the PCAR stress testing, additional capital is required in respect of loan assets arising from personal debt across all four of the examined banks. The Government will ensure that all of the tested banks are recapitalised in respect of these additional requirements.

The results of the PCAR and PLAR on Irish Life and Permanent concluded that the Group required further capital of €4 billion. This will entail a significant restructuring of their business and the disposal of certain non-banking assets. The sale of these assets should raise significant capital for the Group. It is the intention of the State, subject as necessary to any approval required under State Aid rules, to provide the remaining capital to the Group which will involve, in all likelihood a majority stake in the Group being held by the State. This approach will provide sufficient flexibility to the State to decide where the Group fits into the planned revised banking landscape, outlined by me to the Dáil on 31 March 2011 in my Statement on Banking Matters, as the radical restructuring of the Group evolves.