THE ending of the Government guarantee scheme for banks will not open up a hole in the public finances, a civil servant has said.
The guarantee has been in place since September 2008 when it was introduced in a bid to reassure investors about the health of the Irish banking sector. Fees paid by the banks bring in about €1bn to the exchequer each year.
Speaking at the Oireachtas Finance Committee, the secretary general of the Department of Finance John Moran said budget planning is based on no new scheme being in place for next year.
"The numbers for the budgetary projections have not assumed any guarantee income for next year, so there is no hole in the public finances if the guarantee is removed," Mr Moran said.
The secretary general said although the fees would be lost to the exchequer, the savings to the banks would improve their capital positions.
The Department of Finance expects the banks to leave the government guarantee scheme in the early part of next year.