Michael Noonan (Limerick City, Fine Gael)
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Consistent with the terms of the EU-IMF Programme for Ireland, the Central Bank will perform a Prudential Liquidity Assessment Review (PLAR) which will be completed by the end of March. The PLAR will set out measures to achieve steady deleveraging and bring about a reduction in the reliance of the banks on Central Bank funding by the end of the programme period. In addition to the PLAR, the Prudential Capital Assessment Review (PCAR) will be completed by the Central Bank of Ireland by the end of March which will establish the capital needs of banks over the next three years.

The agreed EU-IMF Programme provides for a recapitalization, fundamental downsizing, restructuring and reorganization of the Irish banking sector. The aim of the process is a smaller banking system, which will be capitalised to highest international standards with renewed access to normal market sources of funding. This will enable the Irish banks to reduce their reliance on Eurosystem and Central Bank funding mechanisms.

This Government is committed to a smaller banking system that reduces its reliance on funding from the Irish and European Central Banks. As referred to in the programme for Government, as an interim measure, the Government will seek to replace emergency lending to our banks with medium-term, affordable, official financing. This commitment is part of a comprehensive programme which sets out the Government's goals over a full range of policy concerns and will be addressed in a measured and prioritised manner. All appropriate options to replace emergency lending will be considered.