Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Before I comment on the first part of what the Senator said to me, the short answer to her last question is that the Irish banking standards board, which the banks have indicated they want to move ahead with, will play a number of different roles. It will look at what are the correct ethical standards for our banks and how we can improve culture, set and champion good and best practice and have a single industry code. I see the establishment of this organisation fitting in with the report I will receive on banking culture in the middle of the year. I see it as part of how we respond to the intangible issues that contribute to difficulties we want to be improved and tackled.

On the first part of the Senator's question, we need banks that are competitive, profitable and sustainable in Ireland because if we do not have them, we will not be able to meet the investment and lending needs of our economy to meet the aspirations that I, and I am sure, the Senator have for it in the future. As I deal with this and other matters, I am always aware if that is an issue. One thing I want to be clear on is that I would not accept in any way that there is a link between dealing with this issue and the journey toward competitive interest rates within the Irish economy. This matter must be dealt with in the context of the balance sheets of banks. I support other initiatives which, over time, will allow interest rates in Ireland to move towards the EU average, although they are driven by issues to which I have already referred in terms of the quantity of non-performing loans and the fact that, historically, we have had quite a concentrated banking market in Ireland compared with other countries.