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

It is a little early to be declaring that we have a credit crisis. We still have large domestic banks that are well capable of competing with one another to meet the credit needs that our economy will have.

Credit unions will be able to play a larger role in meeting the economy's credit needs in the years to come, particularly in the context of the changes in branch networks. Those changes are not only happening in Ireland, but in many other parts of Europe as well. A number of the issues that the credit unions raise with the Deputy and me are the consequence of the regulations that the Central Bank has in place to keep those unions safe and protect them and their members. I support the independence of our regulator and the decisions it makes in that regard. That said, we are engaging with the credit union movement. The programme for Government contains a commitment to reassess the legislative framework for credit unions. We are doing that work. The Minister of State, Deputy Fleming, and I are working on some proposals in that regard.

Concerning the Deputy's question on the setting up of a public bank in Ireland, I do not support such an initiative for a number of reasons. First, the level of State involvement in our banking sector at the moment is already advanced. We are a minority shareholder in one bank and the majority shareholder in two others. Our starting position is a high level of State involvement from an ownership point of view. Second, the Deputy touched on non-bank entities such as our credit unions - there is also An Post, which she did not mention but I am sure she would - that are capable of responding to consumer needs that they believe are not being met. Third, we vowed a decade ago that we would never again build a direct link between the balance sheet of our country and our banking sector. A public bank is a way of tightening that link and creating new kinds of risk for us in future. I do not see the case for it. It would take a long time to do. Instead, we need to take stock of where our banking sector stands at the moment and determine what our more appropriate policy priorities are in the context of the exit of KBC and Ulster Bank.