Dáil Éireann Debate, Thursday - 14 May 2026
257. 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 from 2011 to 2019, in tabular form; and if he will make a statement on the matter. [35964/26]
Amharc ar fhreagraThe Central Bank of Ireland has provided me with the following information.
|
Year |
Net interest paid (received) on Credit Institution Deposits €000s |
|
2011 |
100,240 |
|
2012 |
33,377 |
|
2013 |
16,263 |
|
2014 |
5,636 |
|
2015 |
-7,593 |
|
2016 |
-47,755 |
|
2017 |
-67,487 |
|
2018 |
-84,403 |
|
2019 |
-91,704 |
* Interest received is visible as a negative entry. Please note, the figures provided in this response are net interest income figures (netting of interest income and interest expense). For More information please see the Central Bank of Ireland’s [Annual Reports and Performance Statements.]
The Central Bank pays interest on reserves held by credit institutions on current accounts and Deposit Facility accounts.
Between 2011 and 2019, minimum reserve requirements were remunerated at the rate on the ECB’s Main Refinancing Operation (MRO). Over this period the MRO rate fell from a peak of 1.5% in late 2011, to a low of 0% from 2016.
Meanwhile, until September 2019, reserves held on current accounts above minimum reserve requirements were remunerated at the rate on the ECB’s Deposit Facility (DF). The DF rate fell from a peak of 0.75% in late 2011, to a low of -0.50% in 2019. In September 2019, a two-tier system was introduced, exempting some holdings from the negative interest rate, and applying a 0% rate instead. Balances on the Deposit Facility were remunerated at the DF rate.
The volume of interest paid to (or received from) credit institutions is largely dictated by i) the amount of reserves held by financial institutions and ii) the level of the ECB’s interest rates.
Net interest payments to credit institutions (reserve account holders and monetary policy counterparties with DF access) turned from a net expense to a net receipt in 2015 as the DF rate turned negative. Interest income on these accounts increased over the following years as the DF rate was cut further into negative territory.
