The NTMA have informed me that the proceeds of borrowing, as well as revenues such as tax revenue are lodged to the Exchequer account. In general terms, no specific tranches of borrowing were undertaken solely for the purpose of re-capitalising the banking sector. Therefore, it is not possible to accurately quantify that part of the National Debt interest bill that relates to the borrowing undertaken to re-capitalise the banks.
That said, it is possible to identify borrowing undertaken specifically to deal with the re-capitalisation costs of IBRC. Most notably, €25bn of Floating Rate Notes (FRNs) were issued in February 2013 at the time of the liquidation of IBRC.
The FRNs pay interest every six months (June and December) based on the six-month Euribor interest rate plus fixed interest margins which averaged just over 2.6%. Exchequer interest paid on the FRNs over the period 2013 to end-November 2022 is shown in the tables below.
Exchequer interest paid on FRNs €m
|
|
|
|
|
2013
|
2014
|
2015
|
2016
|
2017
|
638
|
755
|
669
|
557
|
435
|
Exchequer interest paid on FRNs €m
|
|
|
|
|
2018
|
2019
|
2020
|
2021
|
2022 (to end-Nov)
|
335
|
249
|
194
|
144
|
61
|
This interest was paid to the Central Bank of Ireland (CBI) as holder of the FRNs. A significant proportion of the interest paid to the CBI was subsequently returned to the Exchequer as part of the dividend paid by the CBI from its surplus income.
The interest paid on the FRNs has been declining steadily since 2014, primarily because of the reduction in the outstanding balance of the FRNs. As of end-November 2022, €22bn of the original €25bn had already been bought back by the NTMA and subsequently cancelled.
The office of the Comptroller and Auditor General (C&AG) has – in a number of its Reports on the Accounts of the Public Service – provided estimates of the net cost of banking stabilisation measures. These reports also include estimates of the associated debt service costs. The most recent report, containing estimates as at end-2021, was published earlier this year.
The link to the report can be found here- www.audit.gov.ie/en/find-report/publications/2022/report-on-the-accounts-of-the-public-services-2021.pdf