Steven Matthews (Wicklow, Green Party) | Oireachtas source

In programme B, which relates to banking, there is an allocation of €300,000 for general banking research. Over the years, what has that fund generated in terms of banking research? To put the question in context, two weeks ago the chief executive of Bank of Ireland was before the committee. She was asked about the challenges facing banks and the banking system in light of Bank of Ireland reducing the number of its retail outlets and the decision of Ulster Bank, which KBC followed this week. It is, therefore, quite obvious that there is a difficulty with banking and that there are great challenges for banks in Ireland. The chief executive outlined a number of areas which presented challenges in the Irish context and, in some cases, in the European context. Muted credit formation was one such challenge, as were the very low interest rates which mean that money on deposit no longer earns money but, rather, is an expense for the bank. Another challenge is the requirement to invest in the modernisation and digitisation of the banking system. In the Irish context, economies of scale are an issue. Ireland is a small country with a small customer base. Two and half large banks operate here. In that meeting, the relatively high risk for Irish lending was also outlined. More capital must be retained against loans here. This information came up as a result of a question on high mortgage rates.

Mortgage rates here may be higher than elsewhere in Europe but that does not necessarily mean the business is profitable or that the higher rates make it much more profitable. Does the Minister share the view that these are the challenges for banking in Ireland? In that context, has the banking research fund ever considered seriously a public bank offering? What are the Minister's views on a public banking system for Ireland at this time?