Gerald Nash (Louth, Labour)
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171. To ask the Minister for Finance the estimated cost of regulation of the financial industry by the Central Bank for 2020 and 2019 respectively; the total amount of subvention provided by the Central Bank for both years; the estimated savings that would accrue to the Exchequer from moving the entire cost of regulation of the financial sector onto the industry in tabular form; and if he will make a statement on the matter. [38682/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware the Central Bank disclose the total cost of Financial Regulation (Net Annual Funding Requirement or nAFR) in their Annual Report each year which is published on the Bank's website (link below).

The details of the 2019 and 2020 cost of Financial Regulation are as follows:

If industry was fully charged, there would be no subvention, however, there are certain costs (e.g. markets supervision) which it may be appropriate to continue to subvent on an ongoing basis where the costs cannot be attributed to specific firms but do relate to the orderly function of markets and the financial stability agenda.

As you will recall, in 2015, the Department of Finance and Central Bank of Ireland issued a joint public consultation on ‘Funding the cost of Financial Regulation’ (CP95).

In response to that consultation, my predecessor as Minister for Finance, Michael Noonan, agreed to a phased movement towards 100 per cent Industry Funding in order to eliminate subvention, by the taxpayer, of most regulatory costs. Since then, recovery rates have increased in stages across most industry sectors, determined on a yearly basis. In April 2019, in order to give greater clarity to industry, I approved the trajectory to bring the recovery rate of levies across most sectors to 100 per cent over the coming years. This change in policy will apply the user pays principle to the regulation of financial services.

The table below shows the planned trajectory for levy rates across all sectors.

www.centralbank.ie/publication/corporate-reports/annual-reports