Written answers
Tuesday, 22 November 2011
Department of Finance
Bank Guarantee Scheme
8:00 pm
Peter Mathews (Dublin South, Fine Gael)
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Question 143: To ask the Minister for Finance, further to Parliamentary Question No. 115 of 15 November 2011, if the Central Bank of Ireland needs approval from the ECB to write-off the ELA to Irish banks; if there would be any consequences to the Irish taxpayers of such a write-off; and if he will make a statement on the matter. [36340/11]
Michael Noonan (Limerick City, Fine Gael)
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The Bank does not comment on ELA operations, other than what is contained in its Monthly Statistics update and its Annual Report. All ELA operations conducted by the Bank are fully collateralised. 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.
Peter Mathews (Dublin South, Fine Gael)
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Question 144: To ask the Minister for Finance, further to Parliamentary Question No. 115 of 15 November 2011, if the letter of formal comfort from the former Minister for Finance has any legal status whatsoever; and if he will make a statement on the matter. [36341/11]
Michael Noonan (Limerick City, Fine Gael)
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The legal basis for the aforementioned guarantees made in favour of the Central Bank of Ireland derive from the Credit Institutions (Financial Support) Act 2008. Specifically the Minister for Finance is empowered under Section 6(1) of the Credit Institutions (Financial Support) Act 2008 to provide financial support in respect of the borrowings, liabilities and obligations of any credit institution that the Minister may specify by order. This includes support by way of a guarantee.
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