Paul Connaughton (Galway East, Fine Gael) | Oireachtas source

I thank the Leas-Cheann Comhairle for the opportunity to speak on this motion. I support the Government's counter-motion as I believe that the work done to date to address the weaknesses exposed by the banking collapse needs to continue and be built upon.

I acknowledge that people are concerned at the number of recent withdrawals from the Irish market and are worried about the implications this will have for competition in the banking sector in the future. This must be a cornerstone of Government banking policy. Bank of Scotland (Ireland) announced its decision to exit the Irish market some months ago, but the recent decision by ACC Bank, followed closely by the decision of Danske Bank, has caused alarm in the minds of many members of the public.

With a financial crash of the magnitude of that experienced in Ireland, financial retrenchment was somewhat inevitable. Restructuring, cost-saving and the re-design of products are issues that all banks operating in Ireland have had to face in recent years. As the banking landscape continues to be moulded, products and services will change and price transparency will be key to ensuring customers get good value for money from their banks. Bank charges are a cause of concern for many people, and with a shrinking number of players in the banking market, much needs to be done to educate consumers to ensure they are fully aware of what their banking service is costing them and how those charges can be reduced.

Much work has been done in recent years to allow customers to switch their accounts between banks, and this will have to be enhanced in coming months. Customers also need to be made aware that in the current business and banking climate, there is little to show for being a loyal customer. Those who shop around in banking terms are rewarded for their efforts, and more must be done to make consumers aware of this. This Government is encouraging new entrants to the Irish banking market and many of the problems experienced by banks that have exited the market related to reckless lending during the property boom. New entrants can look forward to a much more stable and profitable banking landscape in Ireland, should they decide to enter the market.

The announcement in June of this year that the Government is to establish a strategic investment fund, which will absorb the National Pensions Reserve Fund and make the €6.4 billion resources in that fund available for commercial investment to support economic activity and employment in Ireland, is very welcome. Several constituents have suggested to me that the existing structure of ACC Bank should be used for that purpose, a suggestion with real merit as the ACC was established with the aim of providing investment to the agricultural sector and small business to support economic activity and employment, so this would be a natural fit for 21st century conditions.

There were few winners in the crippling recession that Ireland has endured, but one group that benefited significantly from the economic misery caused by job losses, income drops and shorter working hours was Ireland's moneylenders. In the past eight years the number of people using moneylenders has increased by 20%. I know there is a licensing system in place for moneylenders and this was recently strengthened by the Central Bank, but more work remains to be done to protect people who use moneylenders. Many European countries have much lower ceilings on the levels of interest that can be charged by moneylenders and we should consider reducing the highest interest rates, while at all times being mindful of the dangers of pushing Ireland's poorest families away from licensed moneylenders into the even more dangerous embrace of unlicensed moneylenders. To combat the lure of the moneylender, we need a working credit union system and I know the Minister is making every effort to ensure a vibrant credit union is kept in place, one which individuals and families feel they can approach in times of need.

Another issue that must be addressed is the future of banking for people who live in rural areas. The population levels in Dublin and the surrounding commuter counties justify the provision of a significant level of broadband, but many swathes of Connacht are without proper broadband access and thus online banking is not a viable option. Added to this is the closure of many bank branches and a message from banks that they do not want to see customers in branches and instead want them to do their banking online. The reality, however, is that this is not an option for a great many people in this country, not simply an older cohort who are unfamiliar with online banking or those who are reluctant to have all their bank details online - a reluctance that is even more understandable and justifiable given the events of this week and the data protection issues experienced - but also the many thousands who live in areas without access to high speed broadband.

This has serious implications, not just for individuals, but also for many small businesses who are forced to hold cash on the premises because of the closure of local bank branches. This Government has introduced significant legislative changes to build a strong banking sector in light of the serious deficiencies exposed in the financial sector. We are working to ensure householders and businesses, small and large, have access to the credit they need to manage and grow their activities, while at the same time ensuring the proper oversight systems are in place to ensure the collapse of recent years is never repeated. This is why I support the Government's counter-motion on this issue.

See this speech in context