The recapitalisation of Anglo Irish Bank in 2009 was funded by Exchequer borrowing in 2009. Following consultation with Eurostat, the injection was classified as a financial transaction, and therefore, did not affect the General Government Balance. As a general rule of thumb, each €1 billion extra borrowed is estimated to cost the Exchequer about €50 million per year in interest costs. The recapitalisations of both AIB and Bank of Ireland were made by the NPRF from their existing assets, and as such, had no impact on the Exchequer Borrowing Requirement. As these injections were also classified as financial transactions, there was no impact upon the General Government Balance, and as the NPRF used its existing assets to make the injection.
As the nature of any future recapitalisation is as yet unknown, it is not yet possible to assess exactly the effect on the Exchequer Balance and the General Government Balance. However, it would be expected that any further capital injections into financial institutions would take the form of a financial transaction, which would be treated in the same way as previously. In the case of the National Pension Reserve Fund, it is not possible to assess what effect any future recapitalisations may have, as the source of the funding for such recapitalisations has not yet been established.