Kieran O'Donnell (Fine Gael) | Oireachtas source

Professor Lane is probably aware that we also visited the German Sparkasse bank to see its public banking model. My question is not on the Sparkasse model but on the public banking model.

Does Mr. Sibley believe there is a need for an expanded public banking model in Ireland as an additional pillar to the mainstream banks? An Post and the credit unions have recently stated that they are considering providing low interest rate mortgages, as mentioned by the Chair. The An Post proposal is very similar to the low-rate Sparkasse model, while the credit unions state they would offer a competitive rate. Is there a fit for a public banking model involving both institutions whereby the Central Bank would bring in further regulation to allow them to lend to the SME sector in a structured manner, outlawing any form of speculative lending? The credit union movement in particular has a phenomenal network, as does An Post. Their levels of SME and home loan lending would be limited. There may be need for consideration of a central bureau in terms of assessment of SME loans.

I have often stated that if credit unions were not operating in the 1990s, many SMEs would have gone under. Mainstream banks were not extending credit. I was in practice at the time and many of my smaller clients would get a bank draft from their credit union on a Monday morning to lodge to their mainstream bank 100 yards up the road. The credit unions were providing an overdraft facility. I have great affection for the credit union movement, as Mr. Sibley is aware. I am also pragmatic, however, and wish to see if there are areas which could be improved because my biggest fear is that there will be a lack of structured competition in the market when the banks fully recover. What is Mr. Sibley’s perspective on the issue?