Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 115: To ask the Minister for Finance his views on the introduction of a bailout tax, as recommended by the International Monetary Fund, to tax financial institutions' non-deposit liabilities and the sum of profit and compensation to help pay for future bailouts of the banking industry and to prevent the cost from falling on the taxpayer; if he will explore the possibility of introducing an insurance fund for the financial sector, paid for by the financial institutions, to cover future events in the sector; and if he will make a statement on the matter. [17096/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The interim IMF report for consideration by G20 Ministers referred to by the Deputy has not been officially published but was widely reported on in the media. The IMF's work in this area is in response to a request made to it by the G20 in 2009 in the context of discussions on how to ensure the financial sector can make a fair and substantial contribution toward paying for burdens associated with government interventions to repair the banking system.

I understand the main proposals in the report are firstly a financial stability contribution to pay for the fiscal cost of any future government support to the financial sector. I understand the proposal involves such a levy being paid by financial institutions initially at a flat rate but eventually refined so that riskier institutions paid more. Secondly the report proposed a financial activities tax which would be levied on the sum of financial institutions' profits and the remuneration they pay.

The question being examined internationally is what taxes or levies can be designed and implemented in an effective manner to ensure that the resources required to deliver future bank resolutions will be available. This is a complex area that is being examined by EU Finance Ministers and in the G20 and I expect the IMF's work and a forthcoming EU study on the subject of bank levies will be useful contributions to that debate. Ireland will of course participate fully in that dialogue.