Brian Lenihan Jnr (Dublin West, Fianna Fail)

The charge for the provision of the guarantee is based on an assessment of the additional funding costs arising for Government from the guarantee scheme.

It is estimated that the total aggregate charge paid by the covered institutions over the next two years will amount to approximately €1 billion. The thinking behind the charging model is set out in some detail in the annexe to the scheme.

The charge will be calculated separately each quarter for each covered institution having regard, inter alia, to the amount of its covered liabilities, a realistic assessment of the risks, the steps taken by the institution to reduce that risk, consistent with the objectives of the scheme, the long-term credit rating of the institution and also any material changes to its risk profile, subject to the estimated cost to the Exchequer being fully recouped.

Our intention in framing the charge to be made for the guarantees under the scheme was to protect the taxpayers' interest, while not imposing such charges as would add to the problems we are seeking to solve. At the same time, it was our intention that financial markets would continue to function normally and that no unfair competitive advantage would be given to the covered institutions.

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