Pearse Doherty (Donegal, Sinn Fein)
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165. To ask the Minister for Finance when he will make a decision on the contributions by financial institutions to the deposit guarantee directive; if he will look favourably on the credit union movement's request that he uses the discretion allowed to reduce the burden on the movement; and if he will make a statement on the matter. [6157/16]

Michael Noonan (Limerick City, Fine Gael)
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The Deposit Guarantee Scheme (DGS) protects depositors in the event of a bank, building society or credit union, authorised by the Central Bank of Ireland being unable to repay deposits. The DGS protects depositors up to €100,000 per person per institution.

While Article 13(1) of the DGS Directive states that Member States may provide for lower contributions for low-risk sectors regulated under national law, this must be read in conjunction with the entirety of Article 13 and, in particular, Article 13(2) which states that the method for calculating contributions to the DGS shall be approved by the competent authority which is the Central Bank, in co-operation with the designated authority, which also the Central Bank. 

In accordance with the requirements of Article 13, the European Banking Authority (EBA) issued guidelines on methods for calculating contributions to DGSs. Competent authorities must ensure that these guidelines are applied by DGSs when developing methods for calculating risk-based contributions by their members. The Central Bank as the competent authority has indicated that it intends to follow those guidelines.

I have been informed by the Central Bank that the calculation methodology currently being developed will assess and rank each credit institution separately. Therefore, individual credit unions will be separately assessed and ranked, and those deemed to be lower risk under the risk categories as set out in the EBA guidelines will pay a lower contribution. Conversely, individual credit unions deemed to be higher risk under these risk categories will pay a higher contribution.  

It is important to highlight that neither the Minister for Finance nor the Central Bank can act outside the parameters of Article 13 as a whole, which gives the Central Bank the mandate to determine and calculate risk based contributions.