Michael McGrath (Cork South Central, Fianna Fail)
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Question 117: To ask the Minister for Finance if he continues to raise with the European Central Bank the need for a medium-term funding facility for Irish banks. [15105/11]

Michael Noonan (Limerick City, Fine Gael)
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The agreed EU-IMF Programme provides for a recapitalisation, fundamental downsizing, restructuring and reorganization of the Irish banking sector. The aim of the process is a smaller banking system, which will be capitalised to highest international standards with renewed access to normal market sources of funding. This will enable the Irish banks to reduce their reliance on euro system and Central Bank funding mechanisms. This position is supported by our external partners.

I would draw the Deputy's attention to the supportive statement issued by the Governing Council of the ECB following the publication of the PCAR and PLAR in March 2011. The Council stated that the Eurosystem would continue to provide liquidity to banks in Ireland and it would accept securities under Irish Government guarantee, irrespective of the credit rating. These positive moves are recognition by the ECB of Ireland's efforts to deal with the banking crisis and clear evidence that the ECB's commitment is not merely short term.

I wish to confirm to the Deputy that the Irish authorities will continue to make the strong case to the representatives of the Troika, including the ECB, of the benefits to the stability of the Irish banking system from the clarity and support that has already been provided by the ECB on the availability of official financing and to reiterate our assessment of the further strengthening of the Irish banking system that could be achieved through further clarity and certainty on this issue.