Dáil Éireann Debate, Wednesday - 1 June 2016
93. Deputy Pearse Doherty asked the Minister for Finance the savings that would accrue from moving the entire cost of regulation of the financial sector onto the industry, as opposed to the current 50%. [13886/16]
View answerThe Central Bank's total funding requirement for financial regulation activity is determined on an annual basis by the resources required to discharge its legal responsibilities under domestic and EU law. Section 32D and 32E of the Central Bank Act 1942, as amended, provide that the Central Bank Commission may make regulations relating to the imposition of levies and fees on the financial services sector in respect of the recoupment of the costs of financial regulation.
The financial services industry currently funds 50% of the costs incurred by the Central Bank for financial regulation with certain exceptions including the banks which had participated in the Eligible Liabilities Guarantee Scheme, AIB, Bank of Ireland and Permanent TSB, which are required to fund 100% of the Central Bank's regulatory costs. Credit Unions currently contribute approximately 8% to the cost of their regulation.
The current 50% funding arrangement translates into a corresponding reduction in the annual surplus remitted by the Central Bank to the Exchequer. I have been informed by the Central Bank that of the order of €69 million of the Central Bank's 2015 surplus income was redirected to make up for the difference between the costs of regulation and the funding received from the financial services industry.
My Department and the Central Bank last year issued a joint consultation paper to canvass views on the potential for changing the current funding model. My Department is presently working with the Bank on addressing the issues that arose from the 2015 Public Consultation, the results of which will feed into my overall deliberations on this matter.
