Maurice Quinlivan (Limerick City, Sinn Fein)
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46. To ask the Minister for Finance his views on the merits of appointing public interest directors to the boards of banks; and his intention in this regard over the coming years. [17487/16]

Michael Noonan (Limerick City, Fine Gael)
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In the Programme for a Partnership Government ('PPG') the Government has committed to, "Cease to appoint new Public Interest Directors to the banks, and reform the procedures for the appointment of bank directors by the State, with a view to increasing transparency in the process". As the Deputy will be aware the rights for the State to appoint public interest directors to the boards of the covered institutions were derived from the terms of the guarantee schemes introduced in 2008 and which are due to expire in 2017 when the last of the guaranteed liabilities in the banks are due to mature. 

Given the imminent expiration of the guarantee scheme, the length of time that has passed since the last public process for the appointment of bank directors was conducted in 2011 and also the extensive board renewal that has taken place across AIB, PTSB and Bank of Ireland over the past few years, I believe that now is an appropriate time to review the appointment of these directors and propose further open and procedures for any future appointments to the boards.

It is important to note that the State has extensive rights to appoint directors as a significant shareholder in the banks and not just public interest directors appointed under the guarantee schemes. Legal clarity was provided under Section 48 of the Credit Institutions (Stabilisation) Act 2010 not just to the role of the public interest director but to that of the entire boards of those institutions.  It provides that the overriding duty of all directors of the covered institutions relates to the public interest as set out in the Act. Therefore any future appointments by the State to the bank boards will continue to retain this duty notwithstanding the basis for the appointment.

Officials in my Department are currently reviewing options in relation to the appointment procedures for bank directors having due regard  to distinct differences which exist from appointments to other State boards, not least the requirements of the Central Bank/SSM Fitness and Probity Regime and the requirement to have a broad set of expertise relevant to large regulated entities in an ever more complex regulatory environment.