Tommy Broughan (Dublin North East, Labour)
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Question 87: To ask the Minister for Finance if he will estimate the total cost to the Exchequer and the Irish people so far of the bank bailout; if he is concerned at reports that another €35 to €40 billion in recapitalisation may be necessary to reach Basel III funding levels; and if he will make a statement on the matter. [21717/11]

Michael Noonan (Limerick City, Fine Gael)
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The recapitalisation commitments made by the State to date and the additional capital requirements of the banks as prescribed by the Central Bank under the March 2011 PCAR/PLAR stress tests are set out in the following table.

(1) Before banks potential capital raising actions (LME's/Asset Sales / Internally Generated Capital)

(2) Original investment of €3.5bn, of this €1.7bn converted to equity in May 2010

As the Deputy will be aware, the Financial Measures Programme ("FMP") announced on 31 March 2011 included an independent loan loss assessment exercise performed by BlackRock Solutions ("BlackRock"), the results of which have informed the calculation of capital requirements for AIB, Bank of Ireland, EBS and ILP under the PCAR. The PLAR completed as part of that Programme will set banks specific funding targets consistent with Basel III and other international measures of stable, high quality funding. The PLAR will outline measures to be implemented with a view to steadily deleveraging the banking system and reducing the bank's reliance on short term funding.

As I have said previously in my Statement on Banking in March, the PCAR bank stress tests carried out by the Central Bank are certainly among the most thorough and demanding such tests ever performed in Ireland and or indeed anywhere. The detailed results methodology and assumptions underlying these stress tests have been published, emphasising Ireland's firm commitment for this critical exercise to be fully open and transparent. In addition to the very conservative economic assumptions built into the capital scenarios the Central Bank has gone further than its international peers in setting its requirements by taking a three year, rather than two year outlook and also by requiring capital levels after any stress losses of 6%, rather than 5% of Risk Weighted Assets.

In specific terms I am satisfied on the basis of the results of the PCAR assessment carried out by the Central Bank, which have been endorsed by the external authorities, that the loan loss assumptions made reflects a high degree of conservatism and underpin the robustness and credibility of the exercise overall. It should be noted that stress testing is used by banking supervisors to determine whether a bank is adequately capitalised to withstand adverse macro-economic events or unanticipated shocks. Our banks will be well capitalised by international standards following the recapitalisation measures but this position will not then remain frozen in time.

I would nevertheless reiterate that based on the conservative assessments used in the PCAR/PLAR analysis of potential future scenarios for the banks, and indeed the Irish economy, I am entirely satisfied that the banks are currently well capitalised to serve the needs of the Irish economy following this round of measures.

Tommy Broughan (Dublin North East, Labour)
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Question 88: To ask the Minister for Finance if he will estimate the level of bank deposit flight between Q3 2008 and Q2 2011; the impact of that flight on his bank recapitalisation plans; and if he will make a statement on the matter. [21718/11]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank has informed me that in the period from 23 Jan 2009 to 30 June 2011, customer deposit balances (retail, corporate and non-bank financial institutions) across the covered institutions fell by €96 billion from €255 billion to €159 billion. As the Deputy may know already, the single biggest driver of this decline has been the loss of corporate and institutional deposits from overseas as credit ratings on Irish banks and indeed the sovereign were reduced. This trend has effectively run its course. The overall trend in deposits has been stabilising in recent months particularly since the banking announcement on March 31st last.

In relation to the capital plans, the current and future funding structures of the institutions have been factored into the capitalisation plans during the stress testing (PCAR and PLAR) process.