Simon Coveney (Cork South Central, Fine Gael)
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Question 45: To ask the Minister for Finance the value of the charge made in respect of the bank guarantee in the most recent quarter for which he has returns; the rate per cent of covered liabilities which it entails; and if all covered institution are paying at the same rate. [27893/09]

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.

We have received payments from all the institutions for three quarters to date. As of 24 April, there is just over €295 million (€295,585,719.67) in the mandated account which is held in the Central Bank. The institutions are presently in the process of placing the fourth quarter payment in the mandated account.

There are two reasons why the fees paid to date have been less than originally estimated:

-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

However, the application of the guarantee charging model is presently being reviewed by my Department and other stakeholders to ensure the recovery of the aggregate cost 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. 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.

With regard to the rate the institutions are paying for the provision of the Guarantee, I can confirm that the rates are differentiated to reflect relative risk position but owing to the commercial sensitivity of this information, I will not disclose these rates.