asked the Minister for Finance the financial arrangements agreed to by the following banks in the rescue deal of ICI; the amount of money provided by (a) AIB; (b) all the other banks in Ireland; and (c) the resources of the Central Bank; if the AIB will have to repay back any of the money borrowed from the Central Bank, and, if so over how many years.
Written Answers. - ICI Rescue Deal
122.
The financial arrangements made for the funding of the administration of the Insurance Corporation of Ireland plc, were set out in detail in the statements of 4 October 1986 issued by the Central Bank, which is reproduced on pages 67 and 68 of the 1985 annual report of the bank. Under these arrangements £100 million was made available to the Minister for Finance for a period of 15 years for onlending to the Insurance Compensation Fund for the benefit of the ICI administration. This amount was provided as to £70 million from AIB by way of deposit at finest rates with the Central Bank for a period not longer than 15 years and as to £30 million from the Central Bank on similar terms.
AIB agreed to subsidise the £100 million funding by an amount of £3.5 million per annum and the Central Bank also negotiated a special contribution from all licensed banks of £3.5 million per annum of which AIB is to pay £2 million, thus bringing the total AIB contribution to £5.5 million per annum.
These arrangements made available to the administrator of ICI at a variable rate of interest linked to money markets rates (initially about 2 per cent per annum) a £100 million loan for up to 15 years which, in so far as it was not immediately required, could be used to earn revenue for the company and to make a positive contribution to its income.
Since AIB did not borrow any funds from the Central Bank in connection with these arrangements the final part of the question does not arise.