Michael McCarthy (Cork South West, Labour)
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Question 100: To ask the Minister for Finance when he expects the promised two universal full service domestic banks to be fully operational; when the re-structuring process of Irish Life and Permanent is expected to be complete; if he will publish a progress report on the planned re-organisation of the banking sector; and if he will make a statement on the matter. [16426/11]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware from my Statement on Banking on 31 March 2011 that the future of Ireland's banking landscape will be built around the two Pillar Banks, Bank of Ireland and AIB. Each of these banks has already begun to reorganize their operations into core and non-core functions and to implement a carefully managed programme of deleveraging. Both Bank of Ireland and AIB have submitted revised deleveraging plans for consideration by the Central Bank of Ireland. It is important to note that both banks are fully operational and continue to provide an important service to their customers. In my Statement on Banking, I said that the Irish banking system needs to be reduced to a size appropriate to our economy. Our banks will become smaller, more focused on core operations, better funded and better capitalised. In that context I announced that the operations of AIB and EBS would be combined to build a second Pillar bank from the strengths of both institutions. I expect this merger to be completed in early July 2011. The Deputy will be aware that the Memorandum of Understanding between the Irish Government and the EU/IMF requires that the legal merger procedure be completed not later than end September 2011.

Irish Life and Permanent are required to submit their Restructuring Plan to the European Commission for approval by 31 July 2011 and the process to effect the sale of ILP's life insurance subsidiary, Irish Life Assurance has begun and it is expected it will be offered for sale by the end of October 2011. A fundamental element of Government Strategy has been to restore a functioning banking system and the Government has made particular commitments to recapitalising the banks and restructuring the banking sector as part of its Programme for Government. This radical restructuring of the banking system is designed to put our banking system on a firm footing which is essential to Ireland's economic recovery.