Joanna Tuffy (Dublin Mid West, Labour)
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Question 55: To ask the Minister for Finance if his attention has been drawn to arrangements made by a bank to outsource some of its operations (details supplied); the steps he has taken to ensure that any such decisions are done in the public interest, with particular reference to the need to address the unemployment situation here that has been exacerbated by the economic and banking situation, as well as the need to encourage indigenous enterprise and start ups in the software industry; and if he will make a statement on the matter. [26827/11]

Michael Noonan (Limerick City, Fine Gael)
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I accept that it is not in the interest of Ireland Inc. to have these jobs outsourced. However, the Government operates at arms length from the institution referred to in the Deputy's question and does not consider it appropriate to direct a bank in how it should reduce its costs.

Joanna Tuffy (Dublin Mid West, Labour)
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Question 56: To ask the Minister for Finance the steps he has taken to protect the public interest, in the banking sector, much of which is owned by the State, or which the State has a large stake in; and if he will make a statement on the matter. [26824/11]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will appreciate that the protection of the public interest is of primary concern of this Government and steps taken in relation to banking policy have the ultimate aim of protecting that interest. In particular I refer to the areas of the bank guarantee, recapitalization, mortgage assistance, bank remuneration and board membership. The Exchequer, and as such the taxpayer, has benefited from the Bank guarantees. The Credit Institutions (Financial Support) Scheme 2008 (CIFS) provided that each covered institution pay a charge to the Exchequer for its guarantee. The sum of €760,467,567 was paid into the Exchequer in October 2010 in respect of all fees and interest accumulated under the CIFS, which terminated on 29 September 2010. Similarly, those institutions covered under the Eligible Liabilities Guarantee Scheme (ELG) also pay a charge for the ELG. To date, over €1,541,973,128 has been collected under the ELG as a consequence of the support provided by the State and taxpayer. In addition to paying fees for the Guarantee, covered institutions must pay legal and other costs, charges, expenses (including VAT) from time to time incurred by the Minister in any way in connection with the giving of the Guarantee. To date almost €4 million has been collected. Bank of Ireland paid €214.5 million to the NPRF in February 2011 in respect of a dividend on the State's remaining preference shares.

The Deputy will be aware that the Prudential Capital Assessment Review (PCAR), which was carried out by the Central Bank and reported in March 2011, identified an additional capital requirement of €24 billion. The Government has ensured that this recapitalization burden has not fallen exclusively on the Irish taxpayer. For example, since the PCAR announcement, burden sharing with bondholders has realized an additional c. €5 billion. In addition, private investors agreed to an investment of up to €1.123 billion in Bank of Ireland's Tier 1 capital ensuring the State's commitment was significantly reduced thus reducing the burden on the Irish public.

The recapitalisations of the banks have ensured that the State has significant equity in the banks. As outlined in the Comptroller and Auditor General's Report for 2010, the market value of the investments in the banks at 31 December 2010 was €7.6 billion.

The Programme for Government contains a commitment to help homeowners who are facing difficulty with their mortgage repayments and the Government will examine a number of proposals in relation to this commitment. In this context, the Economic Management Council asked that further work be carried out to address the situation of over indebted mortgage holders with a view to identifying a range of responses appropriate to individual circumstances. To facilitate this commitment, a Mortgage Group has carried out this work and its report will go to Government shortly.

The issue of remuneration of those working in the banking industry has been in the spotlight for some time. In that context, the NTMA requested a review of remuneration policies and practices by each of the covered institutions. In that regard, the institutions were asked to consider measures that could be taken to realign staff expectations with regard to remuneration and benefits in the current economic environment and financial circumstances of the banks. The review exercise is ongoing.

The covered institutions are also engaging in cost cutting plans. These are plans arising out of the restructuring and recapitalization programme announce in March. The effects of these plans including the consolidation of the banks around two pillar banks made up of the merger of AIB and EBS, alongside Bank of Ireland will be to enable costs saving through shared services and economies of scale. They are also expected to bring about cost reductions which will improve operating margins and permit the banks to better absorb funding costs which should include increases in the ECB interest rates.

As part of their capital raising requirements, the pillar banks have both agreed to meet an SME lending target of €3 billion each in the 12 month period for 2011, €3.5 billion each for 2012, and €4 billion each for 2013. The banks produce an annual SME lending plan for each of these 12 month period to demonstrate the manner in which they intend to meet the targets.

A fundamental element of Government Strategy has been to restore a functioning banking system and the Government has made particular commitments to recapitalising the banks and restructuring the banking sector as part of its Programme for Government. This radical restructuring of the banking system is designed to put our banking system on a firm footing which is essential to Ireland's economic recovery and in doing so will protect the public interest.