Peadar Tóibín (Meath West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

117. To ask the Minister for Finance the savings that would accrue from moving the entire cost of regulation of the financial sector onto the industry, as opposed to the current 50%. [25292/15]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Central Bank's total funding requirement for financial regulation activity is determined on an annual basis by the resources required to discharge its legal responsibilities under domestic and EU law.  Section 32D and 32E of the Central Bank Act 1942, as amended, provide that the Central Bank Commission may make regulations relating to the imposition of levies and fees on the financial services sector in respect of the recoupment of the costs of financial regulation. Regulations made under Section 32D and 32E of the Central Bank Act 1942, or any amendment or revocation of these regulations, do not take effect until approved by the Minister for Finance.

The financial services industry currently funds 50% of the costs incurred by the Central Bank for financial regulation with certain exceptions including the banks which had participated in the Eligible Liabilities Guarantee Scheme, AIB, Bank of Ireland and Permanent TSB, which are required to fund 100% of the Central Bank's regulatory costs.  Credit Unions currently contribute approximately 8% to the cost of their regulation.

The current 50% funding arrangement translates into a corresponding reduction in the annual surplus remitted by the Central Bank to the Exchequer.  I have been informed by the Central Bank that it is estimated that €67 million of the Central Bank's 2015 surplus income will be redirected, to make up for the difference between the costs of regulation and the funding received from the financial services industry.

My Department and the Central Bank will shortly issue a joint consultation paper to canvass views on the potential for changing the current funding model.  I am cognisant of the increased regulatory burden on industry in recent years and the need to ensure that any changes to the current funding model do not adversely impact the competitiveness of the financial services sector, which is an source of high value employment in Ireland.