Written answers

Tuesday, 28 June 2011

Department of Finance

Bank Guarantee Scheme

8:00 pm

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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Question 108: To ask the Minister for Finance the level and type of insurance, for example, credit default swaps for 100% of the bond value which the current holders of senior unguaranteed bonds in the covered Irish banks have in relation to these bonds. [17314/11]

Photo of Stephen DonnellyStephen Donnelly (Wicklow, Independent)
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Question 109: To ask the Minister for Finance the persons who own the circa €35bn in unguaranteed senior debt in the six covered Irish financial institutions which are still outstanding [17315/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 108 and 109 together.

As I informed this House last week, when a bank issues a bond, whether by private placement or public issue, it would be usual practice for a securities depository company, such as Clearstream and Euroclear, to purchase the bond on behalf of their customers. The bond issuer will likely have little knowledge of the original owners of the bonds; also these initial investors may over time sell the bonds to other investors.

Securities depository companies usually manage, safekeep and administer the securities that it holds on behalf of the purchasers of the bonds and the identity of the purchasers of the bonds is not disclosed in the public domain or to the issuer. As the identity of the purchasers of the bonds are not in the public domain, I cannot advise the Deputy the level and type of insurance these bondholders have.

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