Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Niall Carson/PA Archive/Press Association Images

As it happened: Central Bank Governor questioned over repayment of the Anglo promissory note

Central Bank Governor Patrick Honohan is addressing the Oireachtas on Committee on Finance, Public Expenditure and Reform this afternoon.

WE LIVEBLOGGED ALL the proceedings today as the Central Bank Governor Patrick Honohan addressed the Oireachtas on Committee on Finance, Public Expenditure and Reform on the repayment of the Anglo Irish Bank promissory note.

Honohan was requested to meet the all-party Oireachtas Committee as a matter of “urgent priority” earlier this month, following a vote which the government unexpectedly lost.

The Government is hoping that repayment of the promissory can be delayed until 2025 if it is swapped for long-term government bond. Amongst other things, Honohan was quizzed in public session on possible changes to Budgetary profile in response to such n arrangement and the Constitutional challenge against the payment of the promissory note.

The Central Bank Governor has been welcomed to the Committee by Alex White TD.

Honohan: ahead of the March 2012 payment the Central Bank has been working on mechanism on the question of the promissory note in order to reach a compromise that is agreeable to Ireland.

Michael McGrath: are we being ambitious enough in what we are seeking to achieve – particularly as the ECB has said it can be more flexible?

McGrath asks what interest rate would apply the proposed government bond, and whether the Governor yet has a sense where these discussions with the ECB taking Ireland.

Read Honohan’s full opening statement here>

Honohan: a long term bond is a” major step forward”, as if puts of the need to refinance payments and lowers net cost.

Honohan says that the whole issue needs to be structured in a way that “brings us to a safer place”. Says that discussions were“very much” going in a positive direction.

Honohan on interest rate: We need to look at the underlying economic flows – whether considering  a bond or promissory note.

Honohan asked if he has looked into deferring the interest on the setting on the Irish government bond.

Honohan: The promissory note probably an “overly complicated device” for ensuring the solvency of Anglo.

The promissory note is a “a manifestation of the guarantee” – the Government was faced with the decision to pay all of Anglo’s debts immediately or “put in a note”, says Honohan.

Honohan predicts that there will be several more months of discussions because of the objectives of ‘different players involved’.

Honohan: Any changes reached will not impact this year’s Budgetary profile.

Pearse Doherty TD asks whether there will be any changes to Budgetary profile either this year or next year.

Doherty also asks whether the capital amount can be reduced.

Doherty asks the Governor how this proposal could increase the country’s debt sustainability, as it has been suggested.

Honohan: In terms of the proposal on this payment – it is important to remember that the value of debt of debt to GDP ratio is only one indicator of sustainability. So, by lengthening the debt,debt sustainability will be improved.

Interestingly, Bloomberg reports that the bond that Ireland would be use in order to repay the first €3.06bn would currently costs us almost 7 per cent in annual interest.

Doherty: What is there to prevent IBRC trading the sovereign bond on the markets?

Honohan:  That would be a matter for the Minister for Finance… but I can’t envisage it as a problem.

Kevin Humphreys TD: Can you confirm or deny that the interest on the long term bond is 6.8 per cent?

Honohan: The coupon is 5.4 per cent, but the market yield will depend on the day of the relevant transaction.

Humphreys: Has the Central Bank taken advice on the Constitutional challenge?

Honohan says Humphreys’ questions are all ones he is restricted to answer in public session. Says he will address them privately.

Stephen Donnelly TD asks Honohan what is the projected cash shortfall for this year – ie how much additional money IBRC will need – and about the sustainability of the debt.

Honohan says that the objective of the plan is to eliminate “the cash need” of IBRC by postponing it.

Honohan in response to Donnelly: “The debt position, of course, is calculated… I share your concern that we might get into a situation where we become too optimistic and complacent.”

He adds that making arrangements which prolong the maturity of the promissory note will put us in “a safe position.”

Meeting has gone into private session

That’s all folks – thanks for joining us!

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Close
5 Comments
    Install the app to use these features.
    Mute Aishling Keogh
    Favourite Aishling Keogh
    Report
    Aug 23rd 2012, 6:26 PM

    RIP,another family’s heartbreak this evening :(

    139
    Install the app to use these features.
    Mute Martina Ní Wynner
    Favourite Martina Ní Wynner
    Report
    Aug 23rd 2012, 6:06 PM

    RIP

    138
    Install the app to use these features.
    Mute Keith Moore
    Favourite Keith Moore
    Report
    Aug 23rd 2012, 6:03 PM

    I hope it’s not James it would be such a waste of a young life.

    135
    Install the app to use these features.
    Mute Cian O Donnell
    Favourite Cian O Donnell
    Report
    Aug 23rd 2012, 7:47 PM

    seriously,how many other bodies are floating around in that river at any one time?

    107
    Install the app to use these features.
    Mute Gavin Tracy
    Favourite Gavin Tracy
    Report
    Aug 23rd 2012, 10:41 PM

    It would be someone else’s waste if life then….

    47
    See 1 more reply ▾
    Install the app to use these features.
    Mute Susan Duffy
    Favourite Susan Duffy
    Report
    Aug 23rd 2012, 10:49 PM

    I hate to have say this why are people red thumbing that comment?

    13
    Install the app to use these features.
    Mute louise
    Favourite louise
    Report
    Aug 23rd 2012, 6:15 PM

    So sad news, I know body isn’t identified yet, thoughts with family at such a sad time, too young to die

    123
    Install the app to use these features.
    Mute Richard Mason
    Favourite Richard Mason
    Report
    Aug 23rd 2012, 7:52 PM

    What are the thumbs down about? I can’t see any contentious statements above!

    54
    Install the app to use these features.
    Mute Bernadette Dunne
    Favourite Bernadette Dunne
    Report
    Aug 23rd 2012, 8:51 PM

    Richard just ignore the red thumbs on this story We all try too it is such a sad story for the Family who have to deal with this R.I.P and thought for the family

    42
    Install the app to use these features.
    Mute Mark Vieregge
    Favourite Mark Vieregge
    Report
    Aug 23rd 2012, 7:20 PM

    Oh no… :-/

    50
    Install the app to use these features.
    Mute James O Mara
    Favourite James O Mara
    Report
    Aug 23rd 2012, 9:28 PM

    I hope it not James for hisfamly

    18
    Install the app to use these features.
    Mute Laura Hannon
    Favourite Laura Hannon
    Report
    Aug 23rd 2012, 7:59 PM

    Thumbs down because any loss of life is sad whatever the age.

    47
    Install the app to use these features.
    Mute Richard Mason
    Favourite Richard Mason
    Report
    Aug 23rd 2012, 8:10 PM

    I agree Laura but I thought the idea of the thumbs was to make a statement about the comment. Apologies if I have misunderstood.

    40
    Install the app to use these features.
    Mute Cian O Donnell
    Favourite Cian O Donnell
    Report
    Aug 23rd 2012, 8:42 PM

    you havent mis understood at all,the thumbs system is indeed to indicate ones aggreement/disaggreement with a comment..people will thumbs down anything said on this site,no matter what it is

    45
    Install the app to use these features.
    Mute Norma Kealy
    Favourite Norma Kealy
    Report
    Aug 23rd 2012, 11:43 PM

    well done to the boyne river rescue….a grim task indeed. my condolences to the family and friends of the deceased.

    30
    Install the app to use these features.
    Mute kelly whelan
    Favourite kelly whelan
    Report
    Aug 23rd 2012, 9:49 PM

    at least who ever it is has been.found. not in the way any family Will ever hope for but it Will be at least some peace for them. what a heartbreaking time for all concerned. rip.

    27
    Install the app to use these features.
    Mute Aisling Doyle
    Favourite Aisling Doyle
    Report
    Aug 23rd 2012, 9:09 PM

    Dont worry I seen the red thumb record here 1097 so I wouldnt take it personal sometimes with the iPhone or smart (not so Smart) when scrolling down page sometimes ppl hit off it by error I know I for one have .

    27
    Install the app to use these features.
    Mute Eileen Gabbett
    Favourite Eileen Gabbett
    Report
    Aug 23rd 2012, 9:51 PM

    R I P . Condolences to the family of the deceased .

    26
    Install the app to use these features.
    Mute Tomas Phelan
    Favourite Tomas Phelan
    Report
    Aug 23rd 2012, 11:43 PM

    RIP to this poor soul, it’s someone’s son, brother etc. May his family gain the strength they will need to get them through the next week. how gives a flying f%@k about red thumbers. They are irrelevant. Trolls will be trolls.

    23
    Install the app to use these features.
    Mute kelly whelan
    Favourite kelly whelan
    Report
    Aug 23rd 2012, 9:49 PM

    at least who ever it is has been.found. not in the way any family Will ever hope for but it Will be at least some peace for them. what a heartbreaking time for all concerned. rip.

    8
    Install the app to use these features.
    Mute Kay Tighe
    Favourite Kay Tighe
    Report
    Aug 24th 2012, 1:27 AM

    Very sad that someone’s son has be taken out of the river

    As for the red thumbs why won’t the journal get rid of this red / green
    Thumbs crap

    5
    Install the app to use these features.
    Mute Gavin Tracy
    Favourite Gavin Tracy
    Report
    Aug 24th 2012, 7:49 AM

    People are saying ” I hope it’s not James” . It’s somebody, and someone’s son!! Whoever it is are facing devastation.. I hope it’s not James just pushes the reality to some other poor family

    3
    Install the app to use these features.
    Mute Mick Lennon
    Favourite Mick Lennon
    Report
    Aug 24th 2012, 8:56 AM

    am I right that the body found was that poor boy James,tragic,his life taken so young,only making his way in the world god be good to him

    2
    Install the app to use these features.
    Mute Don McGuinness
    Favourite Don McGuinness
    Report
    Aug 23rd 2012, 11:47 PM

    Why was my comment deleted?

    2
    Install the app to use these features.
    Mute Martin St John
    Favourite Martin St John
    Report
    Nov 26th 2012, 3:29 AM

    Because the journal is like that … Very picky in my opinion and just a tad conservative … It likes to think it’s an important broadsheet , but it’s not really that far removed from most Red-Tops!! Shrude and moronic!!

    1
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.
JournalTv
News in 60 seconds