Written answers

Wednesday, 13 April 2011

Department of Finance

Banking Sector Regulation

9:00 pm

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Question 79: To ask the Minister for Finance if he would reconsider his decision to merge the EBS into AIB in view of the relatively low level of State support for the EBS and the major financial and corporate governance issues at AIB; if he has considered permitting EBS to do a reverse takeover in view of AIB's record; and if he will make a statement on the matter. [7908/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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In my Statement on Banking on 31 March 2011, I announced that the Government intends to combine the operations of AIB and EBS to build a second Pillar bank from the strengths of both institutions. This followed the announcement the previous day by the National Treasury Management Agency that the bid to purchase EBS did not represent good value for the State. The Government's decision followed an in-depth assessment of the future banking landscape in Ireland which was carried out by the authorities with the assistance of expert international consultants. The merger was also recommended to the Government by the Governor of the Central Bank and is consistent with the creation of viable and sustainable credit institutions able to lend to the real economy and to secure the maintenance of financial stability. The merger of AIB and EBS is an important and necessary step in the fundamental reorganisation of the banking system in Ireland in order to meet the Government's objectives for the sector. The merger will be subject to various regulatory approvals including in relation to EU State aid.

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