Taxpayers still funding €58m in bank regulation costs

Taxpayers are paying almost half of a €128m bill for regulating the banks and financial institutions which are failing to fund their own oversight costs.

Central Bank governor Patrick Honohan, after a recent meeting with the Dáil’s finance committee, confirmed the situation was still occurring six years on from the economic crash.

In correspondence sent to Sinn Féin finance spokesman Pearse Doherty and made public last night, Mr Honohan said that of the €128m annual bill to regulate banks and related institutions, the businesses are funding just €70m.

As such, a €58m hole the financial sector was meant to shore up in the wake of the 2008 economic crash, is having to be filled with taxpayers’ money, placing further strain on Ireland’s fragile recovery.

According to the information provided by Mr Honohan, the non-payments relate to insurance and investment firms, money-lenders, securities institutions, fund service providers, and other organisations.

Both the Central Bank and the Department of Finance have confirmed in some of these sectors fewer than half of companies were contributing to regulation costs, a situation Mr Doherty said was unacceptable and must be addressed.

“The time has come for Finance Minister Michael Noonan to tell the financial services industry it must pay for its upkeep. This [the €58m gap] effectively means the taxpayer is picking up the tab for regulating the financial industry.

“That is an unacceptable way for such an important and profitable industry to be regulated,” he said.

In a statement, the Department of Finance said a working group was due to examine the issue, and that Mr Honohan was seeking a “consultation process with a view to moving to 100% funding by industry of the cost of regulation by the Central Bank”.

A spokesperson said the working group would “consider the broad parameters of that consultation, specifically how it would fit with consultation processes” and that it would be led by the Department of Finance.