Mr. Seamus Boland:

I was asked about public banking. Our proposal makes it clear that there is room in Ireland for eight regional not-for-profit banks, each of which would be an independent entity. I will set out the rules that would govern how they work. Each of them would have to serve a population of at least 250,000. In terms of governance, each of them would have an overview board to make sure they uphold the principles of public banking, including relationship-based banking that does not necessarily rely on computer algorithms to tell people whether they qualify for credit. I am talking about the kind of relationship-building that used to happen in the ACC, which I mention to remind the committee that we had this kind of banking in this country in the past. We should not be afraid of it. We should not be afraid that it will step on mainstream banking. It will complement the credit unions. The whole purpose of the kind of banking we have proposed would be to lend money, mainly to the SME sector but also as mortgages. These banks should not get involved in the kind of lending, including personal lending, which is done by the credit union movement at present. When this kind of banking has established itself - we have said that each entity will begin to turn a profit after five years - it will begin to regenerate the money into the region.

If the members of the committee cannot go to Stuttgart or any other part of Germany, I ask them to examine how just one of the many hundreds of banks in Germany has developed the economy in its local region by working with all stakeholders rather than against them. It is on record that when the world's banking system failed, the only type of banking that still survived was local public banking in Germany. I think Angela Merkel had to go a long way to come around to the view that this is the right system. She realised that the German small enterprise sector was actually very lucky to have had this kind of banking. We would have been very lucky if we had had it. The figures outlined by my colleague from the Western Development Commission would certainly look very different if we had this kind of economic hub. I remind Senator Ó Céidigh that we are talking about creating an economic hub in each of the regions as part of the Government's Project Ireland 2040 plan. We are proposing a similar system to that which existed some years ago with the ACC and the ICC. It is nothing to be afraid of. It is a challenge. If we do not live up to this challenge, we will be talking about the decay of Ireland in 20 years' time.