Oireachtas Joint and Select Committees

Wednesday, 9 October 2024

Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach

Engagement with the Central Bank of Ireland

1:30 pm

Mr. Vasileios Madouros:

Of course. I will give a little context as it is more complicated, but I will be quick. We have a stock of investment assets we use, the returns from which fund our operating expenses - our operations, basically. The majority of those are invested in sovereign bonds in the euro area and the US. About 4% of our total assets are invested in a portfolio of equities. These equities are managed on what is called a passive basis, so we are not an active investor. We do not choose the individual stocks. Instead, we ask an external asset manager to track an index on our behalf. We have, as we said in response to the letter from the committee last time, a sustainability policy, part of which is based on exclusions. The exclusions are very much based on global norms. As we said in the letter to the committee in May, our exclusion policy did not have an exclusion for the occupied territories. There is no global norm for exclusions for investment in companies with potential activities in the occupied territories. We looked at this following the questions raised here. There were different risk considerations but one was that it was a high risk that the four banks we divested from were associated with the financing of settlements in the occupied territories. It was a risk-based judgement so we took the risk-based decision to divest of those four companies.