Brian Lenihan Jnr (Dublin West, Fianna Fail)

Seven institutions are covered by the Government guarantee. I referred to six in an earlier reply. I should have said that Postbank is also a guaranteed institution. The covered institutions are AIB, Bank of Ireland, EBS, Irish Life & Permanent, Irish Nationwide Building Society, Anglo Irish Bank and Postbank, their branches and certain named subsidiaries.

Under the terms of the guarantee each covered institution pays the charge quarterly, in advance, payable no later than five working days after the beginning of each quarter, during the period in which the covered institution avails of the guarantee. The charge is calculated by reference to the composition of the covered institution's average month-end covered liabilities during the preceding quarter. Payment in respect of the first quarter was payable at the end of that quarter. That payment was in respect of a covered institution's outstanding covered liabilities as at 30 September 2008. We have received payments from all the institutions for two quarters to date. As of 4 February, €225,709,643.86 is in the mandated account which is held in the Central Bank.

With regard to any planned changes, there is provision in the Act for amendments to certain elements in the scheme, including the charge to the covered institutions. For example, I am empowered to review the application of the guarantee charging model every six months and to make such adjustments as I deem necessary to ensure the recovery of the aggregate cost to be borne by the State as a consequence of the provision of the guarantee, and that the overall objectives of the Act are achieved.

In the context of the six-month review of the guarantee scheme to be completed by mid-April 2009, we will examine how the scheme can be revised subject to European Commission approval and consistent with EU state aid requirements, in ways which include supporting longer-term bond issuance by the covered institutions. This would be in line with international and EU trends where the average term of state cover for bond issues extends beyond 2010.

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