Arthur Morgan (Louth, Sinn Fein)
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Question 39: To ask the Minister for Finance the meetings or correspondence he has had with a group (detail supplied) since the announcement of the Government's credit institution guarantee scheme; and if he will make a statement on the matter. [45325/08]

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 59: To ask the Minister for Finance the meetings or correspondence he has had with a group (details supplied) since the announcement of the Government's credit institution guarantee scheme; and if he will make a statement on the matter. [45330/08]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 78: To ask the Minister for Finance the meetings or correspondence he has had with a group (details supplied) since the announcement of the credit institutions (financial support) scheme; and if he will make a statement on the matter. [45326/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 39, 59 and 78 together.

The Government's Guarantee Scheme has been successful in safeguarding the stability of the Irish banking sector and in restoring its liquidity position. However, international capital market expectations in relation to capital levels in the banking sector have altered. In my statement on 28th November, I indicated that it would be appropriate for the State in certain circumstances, through the National Pensions Reserve Fund or otherwise, to consider supplementing private investment with State participation, consistent with the aim of securing the financial system. In that regard, the State is open to evaluating proposals from potential investors that would add value to the security and stability of the financial system and would enhance its ability to contribute in a positive way to economic development.

I have met in recent weeks with a number of banks and investment businesses. I have indicated that it is a matter for the Board of each financial institution concerned to develop further their own plans for raising capital where appropriate. The relevant institutions have agreed that they will work closely with potential investors and the Government to develop matters further.

Any parties with serious propositions for investment in an institution are of course referred to the institutions concerned. Any proposals involving State participation or investment would be considered only following advice from the NTMA and from financial and legal advisors as appropriate.

It would not be appropriate for me to comment on any specific proposals as the issue of their capitalisation is a matter for individual banks in the first instance, and the details are potentially market sensitive.

James Bannon (Longford-Westmeath, Fine Gael)
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Question 42: To ask the Minister for Finance if he is satisfied that the charge made for the guarantee of bank deposits represents a commercial charge. [45140/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Credit Institutions (Financial Support) Scheme provides that each covered institution shall pay a charge to the Exchequer for the guarantee provided under the Scheme.

The charge for the provision of the guarantee is structured to cover the Government funding cost, which is regarded as the closest measure possible to what could be considered an appropriate price in the current financial environment. It is estimated that the total aggregate charge paid by the covered institutions over the next two years will amount to approximately one billion euros. Each institution will pay its portion of the charge having regard to factors such as the amount of covered liabilities, its risk profile and the steps it is taking to reduce that risk consistent with the overall objectives of the Scheme.

The intention in framing the charge was to protect the taxpayer's 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.

While it may be possible in theory to make an estimate of a commercial or market value for the guarantee, any such estimate would have to make a number of fundamental assumptions. In practice there is no real market price for such a guarantee as provided under the Scheme and it is doubtful if any quasi-market price estimate could reliably be made.