Peter Mathews (Dublin South, Fine Gael)
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Question 115: To ask the Minister for Finance the increase in the eurozone money supply as a result of the emergency liquidity assistance provided by the Central Bank of Ireland to Irish banks; the consequences to the Central Bank, the Irish taxpayer and the eurozone money supply if the money is not repaid; and if he will make a statement on the matter. [34247/11]

Michael Noonan (Limerick City, Fine Gael)
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All Emergency Liquidity Assistance or ELA operations conducted by the Central Bank of Ireland are fully collateralised and some details relating to collateral policy are outlined on page 104 of the Central Bank's most recent Annual Report which can be found on its website. Appropriate haircuts/discounts are applied with a view to ensuring that the Bank would not suffer any loss in the event of default on the loan assistance. The Bank has received formal comfort from the Minister for Finance such that any shortfall on the liquidation of the collateral is made good. As regards the second part of the Deputy's question, the evolution of euro area money supply is determined by the confluence of a large variety of factors; the volume of ELA is not a significant influence.

Peter Mathews (Dublin South, Fine Gael)
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Question 116: To ask the Minister for Finance if he will provide details on any limits the Central Bank of Ireland faces regarding increasing the eurozone money supply by providing emergency liquidity assistance to Irish banks; and if he will make a statement on the matter. [34248/11]

Michael Noonan (Limerick City, Fine Gael)
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The provision of Emergency Liquidity Assistance (ELA) is solely a matter for the Central Bank in consultation with the ECB. As detailed in the Central Bank's Annual Report for 2010 (p.22), the Central Bank, on behalf of the Eurosystem, continued to provide substantial liquidity support to the Irish banking system throughout the course of 2010. The Bank also provided ELA. This is one of the ways that the Bank has responded to the financial crisis. This is distinct and separate from regular funding operations carried out for monetary policy implementation purposes through the ECB.

A loan provided to a credit institution under ELA is granted against suitable collateral, where suitability is in line with criteria defined by the Bank. As with procedures for ECB eligible collateral, appropriate haircuts/discounts are applied with a view to ensuring that the Bank would not suffer any loss in the event of default on the loan assistance.

The Bank has received formal comfort from the Minister for Finance such that any shortfall on the liquidation of the collateral is made good. At end of December 2010 the Bank had extended ELA of approximately €49.5 billion.

The Deputy may wish to note that ELA lending is captured under Other Assets in Table A.2 of the Central Bank's Annual Report.

Peter Mathews (Dublin South, Fine Gael)
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Question 117: To ask the Minister for Finance if it is possible to make an arrangement whereby the Irish banks pay back the emergency liquidity assistance owed to the Central Bank of Ireland very slowly over a very long timeframe; and if he will make a statement on the matter. [34249/11]

Michael Noonan (Limerick City, Fine Gael)
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The provision of Emergency Liquidity Assistance or ELA, is subject to the approval of the ECB and as this type of funding is designed to remedy temporary disturbances in funding availability, this approval must be resought on a periodic basis. As the Deputy will be aware, the bank with by far the largest reliance on ELA is IBRC (Anglo and INBS). This ELA facility is funding the majority of IBRC's balance sheet including the promissory notes. The total amount of the promissory notes issued to IBRC amounted to €30.6 billion at the end of 2010 and a repayment of capital and interest took place of €3.06 billion earlier this year. In recent weeks I have indicated our intention to explore options around reengineering these promissory notes with the aim of improving the position of the Irish State through a lower interest rate and/or lengthening the maturity of the instruments. Such a solution, if agreed, could have the effect of lengthening the repayment profile of the supporting funding which is what the Deputy has inquired about.