Shane Ross (Dublin South, Independent) | Oireachtas source

This motion is particularly appropriate, because it is proposed at a time when the banking landscape is moving very quickly. Two recent events highlight the need to look at the Government's lack of vision for the banking sector, and the lack of success it has in moving nimbly within that context. The most significant events which have happened in banking recently have occurred in the last few weeks, namely, the departure of some foreign banks. I refer to ACC and Danske Bank. That is a disaster for the banking system in Ireland. The Government's amendment displays its lack of vision for the banking sector. The amendment states, somewhat farcically, that "Ireland remains an attractive location in which foreign banks can operate". Foreign banks have voted with their feet. Bank of Scotland (Ireland) is gone. Danske Bank is gone to all intents and purposes. ACC is also gone. To say that Ireland is an attractive location for foreign banks when they are all leaving is absurd.

The skimpy presence of others is also alarming. Ulster Bank, which is owned by its parent, RBS, declared dismal figures two weeks ago and unconvincingly asserted its intention of staying in Ireland subject to a review, which is also ominous. The Government's response to this departure is not to encourage foreign banks to come here, but to bolster the failed policy of the pillar banks. When we heard that the Government was introducing this policy of two pillar banks over a year ago, many of us said this would lead to less competition and to a bigger cartel. What is happening now is that the two big banks are already shaping up for a new cartel. They cannot believe their luck. Government policy has led to a lack of a friendly climate for foreign banks and has sent the foreign banks home, and is leaving it all back to Bank of Ireland and AIB. What happens next is quite simple. The consumers are going to suffer as the cartel is back. They will crucify their customers and bolster their reserves. The policy of pillar banks must be reviewed because that simply is leading to a cartel.

The one strength of the pillar banks is that they are too big to fail. We are back to that scenario. The Government cannot let them, under any circumstances, collapse or deteriorate in any way. Therefore, they have the sort of power that banks had in the past when a duopoly or a monopoly existed. It is unhealthy when the banks cannot be allowed to fail and they know this. The people who suffer will be the consumers and citizens.

The other event which has recently happened is also alarming, and I would like to hear the Minister's comments on it. Two events ask questions of the regulator and about what is going on. First, a big hole in Royal and Sun Alliance was announced last Friday. The facts of that are not known, but it is known that RSA is regulated by the Central Bank. We must know why the Central Bank did not spot that earlier. We must know if the Central Bank was doing its duty. We must know if it was setting the sort of claims ratios which are necessary and if it was monitoring that institution properly. The second event which alarms people about the regulator is the story of Newbridge Credit Union. That credit union is also regulated by the Central Bank and we must ask questions about what the Central Bank was doing in allowing a credit union to make loans which would make bankers blush. How has that been happening on the watch of what the Government claims to be a new and strengthened regulator?

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