Michael McGrath (Cork South Central, Fianna Fail)
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To ask the Minister for Finance in the context of the recent reduction in interest rates paid on State Savings products, if he or his Department had been lobbied by any of the covered institutions in favour of such reductions; if he or his Department expressed a view to the National Treasury Management Agency in respect of the pricing of these products; and if he will make a statement on the matter. [4180/13]

Michael Noonan (Limerick City, Fine Gael)
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Officials of my Department regularly engage with the National Treasury Management Agency (NTMA), covered institutions and other stakeholders on a wide range of issues, including the cost of funding. The NTMA is responsible for the State Savings schemes which includes Savings Certificates, Savings Bonds, Prize Bonds, the National Solidarity Bond, Instalment Savings and Deposit Accounts such as the Ordinary Deposit Account and the Deposit Account Plus. The NTMA keeps the suite of State Savings products and the interest rates paid on them under constant review to ensure that the products remain competitive and attractive to retail investors, while balancing the funding requirements and financing costs of the State.

In December 2012, my Department received a submission from the NTMA, for my approval, to reduce the interest rates on State Savings products, thereby lowering the cost of funding for the State for new funds. I approved the new rates proposed in the light of trends in interest rates in the domestic market generally and of the need to maintain market share in the retail investment sector given the important contribution made by retail investors in the State Savings products to the funding of the National Debt.