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Tuesday, 24 Sep 2013

Written Answers Nos. 165-180

Bank Charges

Questions (165)

Dominic Hannigan

Question:

165. Deputy Dominic Hannigan asked the Minister for Finance the number of applications under Section 149 of the Consumer Credit Act 1995 that have been approved, partially approved and rejected in the years 2008 to 2012; and if he will make a statement on the matter. [39228/13]

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Written answers

I, as Minister for Finance, have no statutory role in relation to bank charges imposed by regulated financial institutions. This is a commercial matter for the lending institutions concerned. The Central Bank has advised me that under Section 149 of the Consumer Credit Act, 1995 (as amended), credit institutions, including prescribed credit institutions, and bureaux de change must notify the Central Bank of Ireland if they wish to introduce a new customer charge or increase an existing customer charge, for providing any of the following services: making and receiving payments; providing foreign exchange facilities; providing and granting credit; maintaining and administrating transaction accounts.

The Central Bank assesses these notifications based on four criteria as set out in the legislation: The promotion of fair competition; The commercial justification; The effect new charges or increases in existing charges will have on customers; and Passing on costs to customers.

(The Central Bank (Supervision and Enforcement) Act 2013 provides that Section 149 is not applied to new credit institutions in their first three years of commencing business in Ireland.) Credit institutions may make a submission to the Central Bank under Section 149 (11) requesting an exemption from making a notification in respect of any charge. A notification made under Section 149 may contain a single charge or a number of charges. Having considered the proposed charge(s) under the assessment criteria as set out in the legislation, the proposed charges may be rejected, approved at lower levels than requested by the entity or approved in full.

Approvals are issued in the form of a Letter of Direction (setting out the maximum permitted charge) and the entity is legally bound to comply with this Direction. Credit institutions are free to impose any pricing differentials for the service up to the permitted maximum and are free to waive fees at their discretion.

The Central Bank provided the following data on the number of applications that have been approved, partially approved and rejected in the years 2008-2012 as follows:

Section 149 notifications 2008-2012

Year

Full approval

Partial Approval

Rejections

Total

2012

9

7

0

16

2011

11

10

0

21

2010

13

6

0

19

2009

10

6

1

17

2008

18

16

1

35

Note: (‘partial approval’ figures may include some rejected charges).

Corporate Tax Regime Issues

Questions (173)

Joe Higgins

Question:

173. Deputy Joe Higgins asked the Minister for Finance the amount IFSC-registered companies paid in corporation tax in 2012. [39309/13]

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Written answers

I am informed by the Revenue Commissioners that the estimated corporation tax paid in 2012 by companies previously licensed to operate in the International Financial Services Centre is of the order of €456 million. Following the end of the IFSC tax regime, the corporation tax rate applying to international financial services activities increased from 10% to the standard rate of 12.5%, and therefore it is generally speaking no longer possible to distinguish corporation tax paid solely on IFSC activities from corporation tax paid on other income.

It should also be noted that the €456 million figure relates only to those companies that were once licensed under the preferential IFSC tax regime, which expired in 2005 and for which registrations ceased in 2002. I am informed by the Revenue Commissioners that it is not possible to identify international financial services companies that have been established since the end of that regime as they are no longer licenced under a specific regime, and so the corporation tax paid by such companies is not included in the €456 million figure.

National Debt

Questions (175)

Joe Higgins

Question:

175. Deputy Joe Higgins asked the Minister for Finance if he will provide information on the creditors of Ireland's national debt. [39311/13]

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Written answers

Those persons/entities holding Irish Government debt would be considered Ireland’s main creditors. The most recent estimate of National Debt is for end August 2013, when it stood at €169.75 billion. The largest components of National Debt at end August 2013, as shown in the table below, were Governments bonds and EU/IMF Programme loans. With regard to the ownership of Government bonds, while the Central Bank of Ireland is the registrar for Irish government bonds, the manner in which they are settled and registered does not allow for the identification of individual holders. However, the Central Bank’s Quarterly Bulletins contain limited information on holders of Irish Government bonds, disaggregated between resident and non-resident holders. Furthermore, the ECB announced in February 2013 that it held €14.2 billion of Irish Government bonds at end 2012.

-

€ billion

Government Bonds

114.78

EU/IMF Programme

61.56

- International Monetary Fund

21.11

- European Financial Stability Facility*

14.61

- European Financial Stabilisation Mechanism

21.70

- United Kingdom Treasury

3.39

- Kingdom of Denmark

0.30

- Kingdom of Sweden

0.45

Other Medium and Long Term Debt

0.77

State Savings Schemes (excludes POSB Deposits)**

15.05

Short-Term Debt

6.58

Cash and other Financial Assets***

-29.00

National Debt at 30/08/13

169.75

Notes:

Rounding can affect totals.

The National Debt figures in the table above are unaudited. The figures take account of the effect of currency hedging transactions.

* A prepaid margin of €0.53 billion was deducted from the EFSF loan of €4.19 billion drawn down on 1 February 2011 giving a net liability of €3.66 billion. The total net liability of

€61.56 billion included in the National Debt at end August 2013 takes account of this reduction

** State Savings Schemes also include moneys invested by depositors in the Post Office Savings Bank (POSB). These funds are mainly lent to the Exchequer as short-term advances. Taking into account the POSB, total State Savings outstanding were €17.7 billion at end August

*** Of which, Exchequer cash balances and other short-term cash management balances accounted for €24.5 billion at end August 2013.

Source: NTMA.

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