Dáil Éireann Debate, Wednesday - 25 March 2026
42. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the total payment from the Central Bank to the Irish Banking sector in the form of interest payments on reserves for each of the last five years, in tabular form; and if he will make a statement on the matter. [22738/26]
View answerThe Central Bank of Ireland have provided me with the following information on the matter.
|
|
All credit institutions (including credit unions) |
|
Year |
Gross interest paid |
|
2020 |
-129,768,000 |
|
2021 |
-316,144,000 |
|
2022 |
152,703,000 |
|
2023 |
2,839,902,000 |
|
2024 |
3,194,906,000 |
|
Total |
5,741,599,000
|
The information above is available in the Central Bank of Ireland’s Annual Reports and Performance Statements.
The eurosystem pays interest on reserves that banks hold on their deposit facility account at the deposit facility rate (DFR). Only monetary policy counterparties of the Central Bank of Ireland have access to a deposit facility account. Up until September 2023, the eurosystem also remunerated minimum reserves at the ECB's DFR and since then minimum reserves have been remunerated at 0%. The vast majority of interest paid to financial institutions in recent years are on reserves held on banks deposit facility account.
The volume of interest payments paid to financial institutions is largely dictated by i) the amount held on the deposit facility by financial institutions and ii) the rate on the deposit facility (DFR). Regarding the former, there remains a large volume of excess reserves in the eurosystem, stemming from the ECB asset purchase programmes, albeit those reserves are declining at steady and measured pace. As a result, the amount of reserves banks hold on deposit at the Central Bank remains elevated. Regarding the latter, the DFR was negative from 2014 until 2022 (-0.50% in the years 2020 to early 2022). This resulted in the eurosystem receiving income from credit institutions in those years (represented by the negative number in 2020 and 2021 in the Table). In 2022, the DFR was increased by the ECB Governing Council, peaking at 4% in 2023 and early 2024. It now stands at 2%.
Please note that data for 2025 has not yet been published. The information will be contained in the Central Bank of Ireland's Annual Report 2025 and Annual Performance Statement, which is set to be published in mid-2026.
