Brian Lenihan Jnr (Dublin West, Fianna Fail)

The purpose of the charge is to cover the long-term cost of borrowing to the Exchequer that arises out of the provision of the guarantee. These additional costs were initially reckoned to be approximately €1 billion. The charging model was based on covered liabilities of approximately €450 billion. As I have pointed out previously, approximately €90 billion of this is covered by the enhanced deposit protection scheme. The covered institutions do not pay the quarterly charge on liabilities covered by the scheme. The total of covered liabilities will naturally adjust over time as bank balance sheets change in the normal course of business. It is fully within my powers to amend the charge to reflect changing events and economic realities. There is provision in paragraph 19 of the scheme to revise the charge if the long-term cost to the Exchequer funding proves higher than initially estimated.

In the first five months of the operation of the charge, it is important that we consider the matter in the context of the review. I did not believe it appropriate to vary the charge to date.

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