Seán Sherlock (Cork East, Labour)
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Question 62: To ask the Minister for Finance the amount of expenses incurred to date under section 4 of the Credit Institutions (Financial Support) Act, 2008; and if he will make a statement on the matter. [44512/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As regards the cost incurred by my Department to date, all internal work associated with the Scheme is being carried out by the reallocation of existing staff so that any associated costs are being met at present from within the Department's allocated administrative budget. In addition, legal advice has been obtained from both the Attorney General's Office, within their existing allocation, and from a private sector law firm. Costs of the latter are not yet to hand. Furthermore, the Deputy will be aware that a particular company has been retained for an initial fee of €2 million to exclusively assist the Government by providing general, strategic and specific technical advice on the Irish banking sector over the two year period of the contract.

This fee, and other costs, should be considered in the context, not only of the potentially serious situation being dealt with, but also of covered institutions paying fees of €1 billion over the period of the guarantee. The thinking behind the Charging Model is set out in some detail in the Annexe to the Scheme.

Paragraph 16 of the Credit Institutions (Financial Support) Scheme 2008 comprehensively sets out the charge that is to be paid by each covered institution that benefits from the Guarantee, including any administrative costs incurred by the State in the process of the Guarantee. This is amplified in the Guarantee Acceptance Deed executed by each covered institution, which provides that each covered institution shall reimburse certain legal and other costs incurred in the process of the Guarantee. While the detailed costs are not determined at this stage, these will be recouped from the covered institutions in due course.