Seán Fleming (Laois-Offaly, Fianna Fail)
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Question 50: To ask the Minister for Finance the arrangements in respect of the €1 billion that is being recouped from the sale of Bank of Ireland shares to private investors; if he will confirm that funding provided to Bank of Ireland through the National Pensions Reserve Fund is to be lodged; the impact this will have on State finances; the implications in respect of the budget deficit for 2011; if he will publish the correspondence he issued to the National Treasury Management Agency and/or the National Pensions Reserve Fund in respect of the transfer of these funds; and if he will make a statement on the matter. [29062/11]

Michael Noonan (Limerick City, Fine Gael)
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On 25 July 2011, I announced the successful conclusion of negotiations by the Government with private investors who, subject to appropriate regulatory clearances being obtained, committed to buy up to €1.123 billion of the NPRF's holding of Bank of Ireland ordinary stock. The investors committed to both initially purchase approximately €0.2 billion of stock and subsequently purchase the remainder after appropriate regulatory approvals had been obtained.

On 28 July 2011, I issued a direction to the NPRF under section 20A of the National Pension Reserve Fund Act 2000 (as amended) that, inter alia, the share consideration received from the disposal to the private investors is transferred from the NPRF to the Exchequer. Pursuant to this direction the net proceeds received from the initial disposal, of €233 million, have been transferred from the NPRF to the Exchequer. When regulatory approvals have been obtained, and the agreed remaining shares are acquired by the private investors, the resultant net proceeds will also be transferred to the Exchequer.

These net proceeds from the initial disposal have been classified as a capital receipt in the Exchequer account and they appear in Note 3 of the end-September Exchequer Statement which was published last week. These receipts benefit the Exchequer finances through reducing the Exchequer deficit. However they do not benefit the General Government measure of the deficit as they are the proceeds of a financial transaction from the swapping of one class of financial asset for another.