Michael McGrath (Cork South Central, Fianna Fail)
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131. To ask the Minister for Finance the balance in the deposit protection account at the end of each year from 2011 to date and currently. [45948/15]

Michael Noonan (Limerick City, Fine Gael)
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The current amount in the deposit protection account is €396m.

The balance at the end of each year from 2011 to 2014 is as follows: 2011 - €435m; 2012 - €403m; 2013 - €380m; and 2014 - €392m.

The Deputy should note however that as a result of the transposition of the Deposit Guarantee Scheme (DGS) Directive (2014/49/EU), the deposit protection account will shortly have no role in a deposit protection context. This is due to the new Deposit Guarantee Regulations (S.I. No. 516 of 2015) requiring annual contributions to be made to a new deposit contributory fund established under these regulations. The requirement is to build the deposit contributory fund up to a level of 0.8% of covered deposits (circa €680m) of all credit institutions authorised in the State by 3 July 2024. This will mean an annual contribution by participating credit institutions of approximately €85m.  

In order to facilitate the move from the deposit protection account to the deposit contributory fund, Part 3 of the Finance (Miscellaneous Provisions) Act 2015, introduced a funding arrangement known as a legacy fund. Under this arrangement the Central Bank will shortly transfer 0.2% of covered deposits or €180m from the deposit protection account to the new legacy fund, in order to provide a backstop to the deposit contributory fund in the early years while it is being built up. The balance of deposit protection account funds will be returned to credit institutions, as there is no longer any legal basis to hold onto this money. 

The reason the level of 0.2% of covered deposits was chosen is that it will ensure that all credit institutions will contribute proportionately the same amount to the legacy fund, and therefore to a DGS pay-out should the contributory fund have insufficient resources during the three-year operational period of the legacy fund.