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02/12/2011
Bank Guarantee Is Passed In Dáil
The Dublin government has - after all - extended its controversial bank guarantee for another 12 months.
In a move that has been described by critics as the most expensive political U-turn in the history of the Dáil, Fine Gael and Labour comfortably won the vote to extend the guarantee, with support from Fianna Fáil.
During a contentious debate on the Eligible Liabilities Guarantee scheme, Minister for Finance Michael Noonan said about €100 billion in liabilities was covered, a reduction from €147 billion last year.
The scheme covers AIB, Bank of Ireland, the former Anglo Irish Bank and Irish Nationwide, Irish Life Permanent and EBS. It was due to expire at the end of December and was subject to European Commission approval every six months.
In a statement today, the Minister announced that he had considered the powers available under the Credit Institutions (Stabilisation) Act 2010 as amended to apply for a Subordinated Liabilities Order to generate, from subordinated liabilities, the residual capital required by the Bank by 31 December 2011 and had invited submissions from interested parties.
"As a result of the bank's announcement that it has now raised approximately €350m of core tier 1 capital, through its tender offer and purchase of capital securities, the Minister is no longer considering the use of the powers available under CISA for these purposes at this time," the statement said.
Mr Noonan said the need for the extension was beyond question, and both the Central Bank and the National Treasury Management Agency had advised the Government to continue it.
(BMcC)
In a move that has been described by critics as the most expensive political U-turn in the history of the Dáil, Fine Gael and Labour comfortably won the vote to extend the guarantee, with support from Fianna Fáil.
During a contentious debate on the Eligible Liabilities Guarantee scheme, Minister for Finance Michael Noonan said about €100 billion in liabilities was covered, a reduction from €147 billion last year.
The scheme covers AIB, Bank of Ireland, the former Anglo Irish Bank and Irish Nationwide, Irish Life Permanent and EBS. It was due to expire at the end of December and was subject to European Commission approval every six months.
In a statement today, the Minister announced that he had considered the powers available under the Credit Institutions (Stabilisation) Act 2010 as amended to apply for a Subordinated Liabilities Order to generate, from subordinated liabilities, the residual capital required by the Bank by 31 December 2011 and had invited submissions from interested parties.
"As a result of the bank's announcement that it has now raised approximately €350m of core tier 1 capital, through its tender offer and purchase of capital securities, the Minister is no longer considering the use of the powers available under CISA for these purposes at this time," the statement said.
Mr Noonan said the need for the extension was beyond question, and both the Central Bank and the National Treasury Management Agency had advised the Government to continue it.
(BMcC)
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