Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Question 135: To ask the Minister for Finance the cost of bank recapitalisation to the Exchequer to date in 2009; if €7 billion of current spending and the deficit relates to direct transfers to banks covered by the bank guarantee; if a further €4 billion of bank supports are to come from the Exchequer cash in hand, Exchequer borrowing and the national pension fund; and if he will make a statement on the matter. [44692/09]

Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Question 136: To ask the Minister for Finance the estimated cost of additional interest payments on the national debt which is directly attributable to bank recapitalisation and banking support costs in 2009; and if he will make a statement on the matter. [44693/09]

Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Question 137: To ask the Minister for Finance if all loans and costs associated with covered bank recapitalisation and financial supports since September 2008 have been made public; and if he will make a statement on the matter. [44694/09]

Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Question 138: To ask the Minister for Finance the estimate of costs associated with bank recapitalisation and covered bank supports in 2010 including additional interest repayments on national debt; if projected further covered bank recapitalisation and support costs and loans and future estimated costs arising from the future gap in public sector pension provision following the expropriations from the National Pensions Fund; and if he will make a statement on the matter. [44695/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 135 to 138, inclusive, together.

With regard to the recapitalisations of AIB and Bank of Ireland, the Government, through the National Pensions Reserve Fund Commission, injected €3.5bn of Core Tier 1 Capital into each institution. In return, the Government received €3.5bn worth of non-cumulative preference shares. This recapitalisation programme was funded from the National Pensions Reserve Fund. €4 billion came from the Fund's current resources while €3 billion was provided by means of a frontloading of the Exchequer contributions for 2009 and 2010. Each institution was charged an arrangement fee of €30m for the recapitalisation, which has been paid by each bank.

The €4bn capital injection to Anglo Irish Bank was made from Exchequer funds. As the Deputy will be aware, capital was provided to Anglo to protect the economy from the wider losses that would have occurred in the event of a failure of the bank, to protect Anglo's substantial deposit base, and to prevent the bank from becoming a systemic threat to the financial system. In this context, there was no arrangement fee charged to Anglo, which would have reduced the bank's capital base. However, under the terms of the Subscription Agreement with Anglo Irish Bank, I am in a position to recoup all costs incurred by the State in the process of providing capital to Anglo, and these costs will be recouped from the bank shortly, when the costs have been fully finalised and charged to my Department. The costs incurred in this regard are currently estimated at c.€120,000, in respect of legal and other expenses.

In addition, under the terms of the Anglo Irish Bank Act 2009 which took the bank into public ownership, expenses incurred in the administration of the Act are to be recouped from Anglo. Costs incurred in this regard for 2009 are currently estimated at c.€1.9m and the Department is currently in the process of collecting this fee.

In the context of the review of the charge under the CIFS Scheme, the NTMA reaffirmed their estimate that the long term cost to the exchequer for the provision of the guarantee remains 15-30 basis points, which roughly equates to €1bn. As of November 2009, €548m is in the mandated account in the Central Bank and it is the Government's intention that we will at least raise the €1bn by the end of the Guarantee period.

I have previously provided the information on the costs on the Credit Institutions (Financial Support) Scheme 2008 in a number of parliamentary questions. The GADs which were signed by all the covered institutions provide that all administrative costs associated with the implementation of the CIFS Scheme are recoupable from the covered institutions. In August 2009, a total of €2,495,449 was recouped and relates to the period, September 2008 to April 2009. Officials in my Department are in the process of calculating the costs to which are liable to be recouped for the remainder of 2009 and the institutions will be billed in due course. With regard to costs arising out of bank support schemes in 2010, it is my Department's intention to recoup all administrative costs associated with the CIFS Scheme, ELG Scheme and as in the case of previous recapitalisations, a recapitalised bank will be charged appropriately.