Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank Senator Barrett. The enabling legislation has been designed with flexibility in mind. Therefore, I would prefer to stay away from the inclusion of prescriptive prohibitions in the text. However, it is the case that two of the funders at the establishment of the strategic banking corporation of Ireland will contractually prohibit this funding from being put to use in investment in property. This will be reflected in the operation of the new corporation. I am pleased to confirm that what Senator Barrett has put on the record is the case in respect of KfW and the European Investment Bank.

The strategic banking corporation is not intended to fund personal loans. The general practice throughout the OECD is for these development institutions to eschew such uses of their funding although some have been known to play a policy role in protecting households from structural gaps while providing for their funding needs. For example, KfW has a stated role in providing credit for housing. I do not foresee a need for SBCI to become involved in this area. Again, the flexibility to be able to react to a given credit need in the economy at some point in future is desirable.

I am also wary of introducing text which may put sole traders at a disadvantage. While SBCI is not being established with a banking licence at the start, it may develop in that direction and financial intermediation may become a part of its operating model as it seeks to match its expanding operations with more diverse funding sources. I am pleased to give the assurance Senator Barrett seeks and I thank him again for raising this issue on Committee Stage.