KEY ASPECTS of the State’s dealings with the banking sector have been delegated to the National Treasury Management Agency (NTMA) by Minister for Finance Brian Lenihan.
The move is understood to be aimed at creating a sharper focus on the State’s financial interest in the banks, while leaving Mr Lenihan and the Government to address broader economic and social concerns.
It may also serve to alleviate European Commission concerns about political interference in day-to-day financial decisions being made by institutions receiving support from the State.
The main functions being delegated include discussions with the so-called covered institutions about their capital needs, as well as discussions in relation to “realignment or restructuring” within the banking sector.
The NTMA will also be delegated with the Minister’s powers in relation to the management of the State’s shareholdings in credit institutions, and some remaining functions under the State guarantee scheme.
It will also be delegated functions in relation to the giving of advice on banking matters generally, including issues relating to crisis prevention, management and resolution.
“As the banking crisis has evolved, officials of my department and the NTMA have worked together very closely,” Mr Lenihan said. “The demands of the crisis have required significant adjustments in the deployment of resources in both organisations.
“The recent passage of the National Asset Management Agency (Nama) legislation provides me with an appropriate opportunity to consider further the division of work between my department and the National Treasury Management Agency. The Department of Finance will necessarily remain closely involved with banking and financial services issues.”
The delegated functions will be carried out on the Minister’s part by the agency and in close consultation with him and his officials.
Fine Gael’s finance spokesman Richard Bruton said he wondered if the Minister’s “eagerness” to delegate functions was driven by a desire to hide key decisions from public scrutiny.
However, the department said Mr Lenihan “will continue to be fully responsible and accountable to the Oireachtas, and these arrangements will not result in any changes in that regard.”
