Honohan confident of deal on promissory notes
The Governor of the Central Bank has said he is hopeful of a successful renegotiation of promissory notes payable to the former Anglo Irish Bank.
Patrick Honohan today told the Joint Oireachtas Committee on Finance, Public Expenditure and Reform tthat the €31.bn payment due at the end of this week - and others due over the next 10-year period - are a "risk to financial stability".
Mr Honohan said he cannot reveal details as negotiations are ongoing, but he is confident of a deal.
"The Promissory Notes owned by the Irish Bank Resolution Corporation (IBRC) (the renamed Anglo) are part of the legacy of the banking crisis," he said.
"They represent just one aspect of a large and complex structure of institutional indebtedness involving the Government, the banks and the central banking system, which has resulted from that crisis."
Mr Honohan said this debt "does hang over the economic and financial recovery of Ireland" and "needs to be set on a more secure basis".
He said that ahead of the scheduled March 2012 payment, the Central Bank has been "working vigorously with the ECB and other parties" on ways of funding this cash payment over a much longer period to reduce the risk to financial stability.
"While some technicalities still need to be resolved, it now seems likely that this effort will be successful," Mr Honohan said.
