Catherine Murphy (Kildare North, Independent)
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97. To ask the Minister for Finance when the European Commission advised his Department on the necessity to have in place a relationship framework, and operational protocol, to govern interactions between him, as Minister, and the Irish Bank Resolution Corporation; if that advice indicated that a set figure would be advisable to trigger consultation, where a transaction would have an adverse impact on the capital of the Corporation; if so, the reason there was a delay in implementing this advice; if he will make available, copies of all correspondence between his Department and the European Commission, relating to this matter; and if he will make a statement on the matter. [10965/15]

Michael Noonan (Limerick City, Fine Gael)
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As part of Ireland's third review under the EU/IMF Programme of Financial Support, a report on which was published in September 2011 and is available on the Department of Finance website, there were a number of conditions/actions which Ireland committed to. One of which was to develop a framework to govern the exercise of the State's ownership rights in the banks resulting from the capital injections, including to put in place relationship frameworks with the banks to protect the commercial basis for the banks' operations while under government ownership.

This matter was again discussed during the fourth review under the EU/IMF Programme of Financial Support, the report on which is also available on the Department of Finance website. It was noted in this report that the recently formed banking division in the Department of Finance were "currently developing relationship frameworks with the banks, to ensure that their core businesses will be run on a commercial basis". The fifth review, the report to which was published in March 2012 noted that "The authorities are finalizing relationship frameworks with the covered banks consistent with their commitment that their core business will operate on a commercial basis".

The relationship framework's were in place with each of the banks under State ownership before the report on the sixth review under the EU/IMF Programme of Financial Support was published in June 2012.  Between each of these aforementioned reviews, officials in my Department were progressing the introduction of relationship frameworks with each of the banks through ongoing discussions and negotiation. Each of the Relationship Frameworks were prepared following significant legal and competition law input from the State's legal advisors, which included, among other advice, the inclusion of financial thresholds which would trigger consultation with the Minister for Finance. Before the Relationship Frameworks for each of the banks were introduced, it was required that they be reviewed by the Directorate-General for Competition and the Irish Competition Authority.

On 30 March 2012, Relationship Frameworks were put in place by my Department with each of the banks in which the State acquired an interest in the context of the financial crisis to govern the relationship between the State, as shareholder, and each bank.  They were designed to recognise the separation of each bank from the State, to ensure their businesses would be run on a commercial, cost effective and independent basis to ensure the value of the banks as an asset to the State, and to limit the State's intervention to the extent necessary to protect the public interest.

Under the Relationship Frameworks each bank was to remain a separate economic unit with independent power of decision with its board of directors and management team retaining responsibility for determining the bank's strategies and commercial policies and conducting its day-to-day operations.

As the Deputy is aware, IBRC had a Relationship Framework in place from July 2009 pursuant to the Anglo Irish Bank Corporation Act 2009. My officials will review the files surrounding the implementation of this original Relationship Framework for Anglo Irish Bank Corporation and will revert to the Deputy on this matter.

A revised Relationship Framework with IBRC was published on March 30, 2012 in line with the introduction of similar agreements for each of the other banks. That followed considerable interaction with the management and Board of IBRC.