Brian Cowen (Laois-Offaly, Fianna Fail)

As the Deputy noted, sections 14(a) to 14(c) amend section 18 of the Act under which the National Treasury Management Agency provides a deposit-taking and lending facility known as the central treasury service to local authorities and non-commercial semi-State bodies, which are designated by the Minister for Finance with the approval of the relevant Minister. The purpose of the central treasury service is to make competitive banking facilities available to public bodies. This facility is being extended now to the Courts Service, certain third level colleges, the Railway Procurement Agency and the Housing Finance Agency. Section 14(d) will allow the NTMA to engage in transactions of a normal banking nature in respect of its central treasury service activities. This will, for example, allow the use of Internet rate swaps to hedge interest rate risk where fixed-rate loans are provided through the central treasury service.

Section 14(e) is a technical and consequential amendment arising from the previous subsection which amends references to take account of the new subsections in section 22 of the National Treasury Management Agency Act 2000. Section 14(f) inserts a new section 25A into the National Treasury Management Agency (Amendment) Act 2000. This will allow the NTMA to provide foreign exchange services to Government Departments and to bodies which can avail of the NTMA's central treasury service, such as local authorities and non-commercial State-sponsored bodies. Giving the NTMA this power could yield savings of between €500,000 and €700,000 for the Department of Foreign Affairs alone in respect of transfers of moneys to the overseas development aid programme and so on. It builds on an existing facility provided by the NTMA for non-commercial State and semi-State bodies and local authorities which provides for more competitive banking facilities. We wish to make it available to the Courts Service, where developments have been taking place recently, and to third-level colleges, the Railway Procurement Agency and the Housing Finance Agency. We want to make sure we use the central treasury service to obtain the best possible banking services for these agencies in addition to the agencies being served already.

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