Mr. Seamus Boland:

I thank the Chairman and members of the committee for inviting Irish Rural Link to make a presentation on local public banking.

Irish Rural Link is a national voluntary organisation, representing communities from Donegal to Kerry, from Galway to Wicklow, across the midlands. We are very proud to be involved in the proposal. We made an extensive submission to the consultation process investigating a local public banking model for Ireland and we appreciate that the joint committee's Report on Local Public Banking has taken this submission into consideration at great length. Irish Rural Link is delighted that the report recognises the merits of public banking models and people have listened to our arguments as to how this will add to the financial stability of our regional economies. However, we have responded to the report in a formal rebuttal as we found misunderstandings within the report with regard to our proposed model. I have included a copy of that rebuttal in the submission to this committee.

I draw attention to two areas in which we were disappointed at the lack of understanding shown in the local public banking report, competition in the banking market and the Sparkassen model and how it differs from the pillar banks.

We are particularly disappointed with the view in the report that an Irish local public bank would risk crowding out the private sector institutions. The Government has often stated a desire to increase competition in the banking sector so it seems counter-intuitive to be afraid of the effects of introducing competition apparently on the basis that it would reduce the oligopoly profits of existing market players. We note that in the past, the ACC and the ICC banks played an enormous role in the development of the economy of Ireland.

It is also unfortunate that the report has some inaccuracies in relation to their understanding of the Sparkassen model and how it operates in Germany. An invitation was extended to the officials carrying out this investigation to visit Germany to see at first hand the model in action but they did not avail of this opportunity. We are delighted that Irish Rural Link and our partners were able to facilitate members of this committee to take part in such a visit and we are confident that this has substantially enhanced the members' knowledge of the operation of the model. Coincidently, my colleagues Ms Sinead Dooley and Mr. Noel Kinahan are just back from such a trip with members of the Joint Committee on Business, Enterprise and Innovation, which I am sure was equally well received.

We are very much looking forward to participating in the stakeholder forum as part of the independent external evaluation referred to in the Government’s report.

It should be noted that we have submitted proposals for the terms of reference and we are awaiting a reply to that. I am sure that this forum will provide the opportunity for Irish Rural Link and other stakeholders such as the credit union movement - and we are glad to see their representatives here today - to participate in the process.

We make it clear that by adopting the model of public banking, this creates an opportunity to bring another dimension to our banking sector. It is not a new idea as we have had it before.

Irish Rural Link has no vested interest but wants to ensure that the well-being, financial and social, of rural Ireland continues and is not lost or dependent on the current pillar banking system.

We would welcome questions.