Michael McGrath (Cork South Central, Fianna Fail)
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Question 218: To ask the Minister for Finance his plans to allow bonus payments to be made in the covered institutions; and if he will make a statement on the matter. [20105/12]

Michael Noonan (Limerick City, Fine Gael)
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The present agreements underpinning the State's investment in the covered institutions contain prohibitions on the payment of bonuses. This is the current position on the issue. The Deputy will be aware that we recently published, as required under our Troika obligations, the respective relationship frameworks between the State and the banks. These documents stipulate, amongst other matters, that the institutions will be run on a commercial basis whilst recognising the prohibition on the payment of bonuses. The documents are also forward looking and as such allow for the consideration of incentive schemes to be adopted, in the future, to achieve the objectives of safeguarding the State's substantial investment into the banks and the achievement of the banks' business plans. Any such schemes will have to be vastly different from the versions which have helped to cause such havoc to our financial system – the focus being on long term value creation, discouraging excessive risk taking, and tied to verifiable targets to achieve the above objectives.