Written answers

Thursday, 23 June 2011

Department of Finance

Banks Recapitalisation

6:00 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 61: To ask the Minister for Finance the consultations he has had with the European Commission or the European Central Bank prior to his recent announcement in the United States of his intention to impose losses on unsecured, unguaranteed senior bondholders in Anglo Irish Bank and Irish Nationwide Building Society; and if he will make a statement on the matter. [16938/11]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 62: To ask the Minister for Finance when he intends to formally raise with the European Central Bank his plans to impose losses on unsecured, unguaranteed senior bondholders in Anglo Irish Bank and Irish Nationwide Building Society; and if he will make a statement on the matter. [16939/11]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 63: To ask the Minister for Finance if he intends to proceed with his plans to impose losses on unsecured, unguaranteed senior bondholders in Anglo Irish Bank and Irish Nationwide Building Society in the absence of the support of the European Central Bank. [16940/11]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 64: To ask the Minister for Finance if he will provide details, including maturity dates, of the remaining unsecured, unguaranteed senior bonds in Anglo Irish Bank and Irish Nationwide Building Society. [16941/11]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 65: To ask the Minister for Finance if he will provide details of the nature of the type of securities in place in respect of secured senior bonds in Anglo Irish Bank and Irish Nationwide Building Society; and if he will make a statement on the matter. [16942/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 61 to 65, inclusive, together.

The Government's policy with regard to senior bondholders is consistent and has not changed from the position I set out in my Statement on Banking on 31 March last. All senior bondholders in the pillar banks AIB/EBS and Bank of Ireland, and Irish Life and Permanent, whether guaranteed or unguaranteed, will be repaid in full. As I set out to the House in my Statement in March, and on a number of occasions since then, this is essential to maintain the market reputation of these institutions and to ensure their return to market funding in due course.

However, in my March Statement, I also indicated that the position regarding the bondholders in Anglo and INBS – institutions in different circumstances to the remainder of the banking system - would be considered following the completion of the independent review of the capital requirements of INBS and Anglo last month. While the Central Bank has concluded that no additional capital is required for these institutions, this does not remove the onus on the Government to consider all options to reduce the cost to the taxpayer of resolving these institutions. Therefore, while there was no specific consultation with the European Central Bank or the European Commission prior to the recent announcement regarding the Anglo and INBS senior bonds, this announcement was consistent with the Government's position as stated previously.

I have also indicated that, in the autumn, I will raise the issue of Burden Sharing which will allow for the imposition of loses on unguaranteed and unsecured senior bondholders in Anglo and INBS with the IMF and EU authorities.

Regarding the details of the maturity schedule of the remaining unsecured, unguaranteed senior bonds in Anglo Irish Bank and Irish Nationwide Building Society, this detailed information is being compiled and will be supplied to the Deputy as soon as possible. Regarding the nature of the securities in place in respect of the secured senior bonds, Anglo Irish Bank advise that these bonds are backed by Anglo's commercial property mortgage loans. Irish Nationwide advises that it does not have any secured bonds in issue.

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