Written answers

Tuesday, 20 October 2009

Department of Finance

Financial Institutions Support Scheme

9:00 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 229: To ask the Minister for Finance the income received to date in 2009 by the State arising from the bank guarantee scheme and the recapitalisation of banks (details supplied). [36937/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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Under the Credit Institutions (Financial Support) Scheme 2008, each of the covered institutions pays a quarterly charge to the Exchequer which is held in a mandated account in the Central Bank. This charge is paid quarterly in advance and all payments have been made in respect of 2009 which amounts to €437,544,223.

In the context of the six month review of the charge which was undertaken by my Department, and given the shortfall in monies raised from the charge to date, the charge factor levied on each institution has been amended and new, higher rates are being applied for the remainder of the Scheme. Indeed, the monies to be received by the Exchequer in 2010 may be increased as institutions move from the existing guarantee scheme into the proposed revised guarantee scheme shortly to be brought to the Oireachtas.

With regard to the recapitalisation, in return for a capital injection of €3.5bn of Core Tier 1 Capital, the Government has received €3.5bn worth of non-cumulative preference shares. These preference shares pay a fixed coupon of 8% annually in arrears. However, as the first payment dates due under the recapitalisation fall in 2010, no monies are to be received in 2009 in respect of the recapitalisation.

In addition to the charge for the Guarantee levied on the covered institutions, institutions under the Guarantee are obliged to recoup the administrative costs of the Guarantee to the Minister. To date payments of €2,495,459 have been made, covering the period September 2008 to April 2009. There will be further charges made periodically between now and the end September 2010 when the Scheme is due to end.

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