Joan Burton (Dublin West, Labour)
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Question 123: To ask the Minister for Finance if he will confirm that income from the bank guarantee scheme for 2009 will amount to €455 million; the reason this is €45 million less than the €500 million figure cited at the time the guarantee was granted; the procedure for reviewing the implementation of the guarantee at regular intervals; if the formula for calculating the guarantee fee is to be reviewed as part of this process; and if he will make a statement on the matter. [16932/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The purpose of the charge is to cover the long-term costs of borrowing to the Exchequer that arise out of the provision of the Guarantee to the covered institutions. These additional costs initially were estimated to be about €1 billion. The charging model for recouping these costs was based on covered liabilities of circa €450bn. However, as I have pointed out previously, about €90bn of that amount is covered by the enhanced Deposit Protection Scheme. The covered institutions do not pay the quarterly charge on liabilities covered by this scheme. Furthermore, the total of covered liabilities will naturally adjust over time as bank balance sheets change in the normal course of business. For these two reasons, therefore, the fees paid to date have been less than was estimated originally.

Nevertheless, 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 to ensure that the overall objectives of the Act are achieved. Therefore, I will review the rate of charge to ensure that there will be no inappropriate shortfall in the yield to the exchequer. I would like to assure the Deputy that I will utilise fully the powers given to me under the Scheme to safeguard financial stability and ensure that the long term interests of the taxpayers are protected.