Dáil Éireann Debate, Thursday - 16 June 2022
78. Deputy Brian Stanley asked the Minister for Finance the outstanding amount owed in relation to the bank guarantee; the cost of servicing this debt each year; and the date the final payment will be made. [30900/22]
Amharc ar fhreagraIn answering the Deputy's question, I am assuming he is asking about the debt that the State has accumulated from recapitalising the banking system which flowed from the then Government's decision to guarantee bank liabilities.
The most recent analysis carried out by the Office of the Comptroller and Auditor General (C&AG) indicated that the estimated net cost to the State from banking stabilisation measures as at end-2018 was approximately €41.7 billion. This estimate is after taking account of the estimated value of the State’s investments in banks and NAMA’s retained earnings. The C&AG are currently undertaking work to refresh these figures as at end-2021 and updated figures will be available in due course.
The Exchequer continues to incur the cost of servicing the debt associated with the banking stabilisation measures. While the amounts invested in recapitalising banks, proceeds from disposals, income accruing from the investments, and estimated residual values can be readily identified, estimation procedures are required to identify the costs incurred by the State in funding the investment. The estimate of the net cost of banking stabilisation has remained relatively consistent since the initial estimate was produced in respect of the end of 2014. In total, the debt-related cost to the State associated with the investments was c.€22 billion over the period 2009 to 2018. In the long-term, the cost of servicing the debt associated with the investments is projected to be around €420 million annually for each percentage point that the State pays on its debt, per the most recent C&AG projections. For example, at an average cost of debt of 2.5%, the cost of servicing the debt would be around €1.1 billion annually. This estimate does not take account of the additional interest costs that will arise in the future from funding the annual debt servicing cost.
