Government figures on bank assets outdated, says Varadkar

THE GOVERNMENT'S claim that the assets of Irish banks exceed their liabilities by €80 million is likely to be incorrect, as it is based on outdated figures, the Fine Gael spokesman on Enterprise, Leo Varadkar, said yesterday.

He said Minister for Finance Brian Lenihan had informed him, in response to a Dáil question, the estimate was based on the end-2007 published accounts of the credit institutions concerned.

The Minister added that work was currently under way by the Central Bank and Financial Services Authority to refine and update this figure to September 29th, 2008.

"In the Dáil debate on the Government's bank guarantee scheme the Taoiseach and the Minister kept repeating the claim that the assets of the banks exceeded liabilities by €80 million.

"If they knew this figure dated from the end of last year why did they not tell the Dáil about it as I am sure that it has changed significantly since then," he said.

He asked whether the Taoiseach or Mr Lenihan had sought up-to-date information from the banks and called on the Government to forensically examine bank balance sheets in order to determine the true extent of exposure for taxpayers.

Mr Varadkar also said that neither the Taoiseach nor the Minister revealed the European Central Bank had loaned €50 billion to Irish banks and had first call on the debts if any of the banks concerned went to the wall.

Mr Varadkar rejected the claim by Mr Lenihan that the Irish banks were experiencing a liquidity problem. If that was the case he should explain why the State guarantee has not worked.

Mr Varadkar repeated his belief that the banks must also be suffering from a capitalisation problem and that Ireland would probably have no choice but to follow the UK, USA, Germany and the Benelux countries by taking a stake in the banks.

© 2008 The Irish Times

This article appears in the print edition of the Irish Times