Gerald Nash (Louth, Labour)
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Question 65: To ask the Minister for Finance if all financial institutions in receipt of State support have provided cost-cutting plans to him to avoid increases in interest rates as described in the Programme for Government; and if he will make a statement on the matter. [21632/11]

Michael Noonan (Limerick City, Fine Gael)
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The financial institutions which the Deputy refers to are engaging in cost-cutting plans which are already underway. These are part of the plans arising out of the restructuring and recapitalisation programme announced last March.

The effects of these plans including the consolidation of the banks around two pillar banks made up of the merger of AIB and EBS, alongside Bank of Ireland will be to enable costs saving through shared services and economies of scale. They are also expected to bring about cost reductions which will improve operating margins and permit the banks to better absorb funding costs which should include increases in ECB interest rates.

The Government remains in consultation with the banks in connection with the more significant parts of these plans including a significant reduction of employee numbers.