Gerald Nash (Louth, Labour) | Oireachtas source

I welcome the opportunity to participate in the debate on this pivotal issue for Irish society and the economy at this particular moment in time. The level of public interest in this issue is growing. This is evidenced by the fact that we are having a significant debate on this significant issue so soon after we had a similar debate a few short months ago. The type of changes we have seen in the banking landscape over the past few weeks are of the type one would usually see take place in the banking market or in any given economy over a period of years. Ulster Bank is to exit Ireland. KBC Ireland also plans to exit. Bank of Ireland is closing 88 branches and, over a period of time, the Government will sell its stake in Bank of Ireland. I, too, question the timing of that particular decision. Notwithstanding some sensitivities around the sale of bank shares, I ask that the Minister or Minister of State elaborate on that in their closing remarks.

There will be huge change in the way we do banking. We have seen change over the past couple of years and it will escalate. It will impact on thousands of good and highly skilled jobs. I regret that in recent times those working in the banking industry have been treated like pawns in a game by senior bankers. Little regard has been shown to them in the decisions that have been taken on bank branch closures and banking competition and consolidation. All of these dramatic changes will fundamentally alter the banking and business landscape over the next few years. While all of this very radical change is happening on a piecemeal basis, it is taking place in the absence, until now, of any real sense of strategic of direction for the Irish banking and finance sector from the Department of Finance, Government and the Central Bank. Nobody expects the Government to involve itself in the day-to-day decision-making and operation of banks, including in the banks in which we have significant shareholdings. However, given the scale of the State's investment and shareholding, we are entitled to expect that the State's interest in the direction of banking would extend beyond divesting itself of bank shares.

I am pleased the Minister confirmed today that a review of banking will take place under the aegis of his Department. I have said previously in this House and elsewhere that the future of banking should not be left to bankers alone. It is a matter for government, for all of us as policymakers and for all stakeholders. For some time now, I have been taken with the detailed proposition set out by the Financial Services Union in regard to a forum on banking that would be led and facilitated by the Department of Finance, but would not necessarily be owned by the Department of Finance. We need such a national conversation about the future direction of banking. I am pleased to note that the Minister referenced that today. I am interested in hearing the nuts and bolts around how that will proceed, particularly the timeline, how it will be scoped out, what the terms of reference might look like and how we, as Opposition spokespersons and Members of this House, can contribute to that process.

This will be a very important process. We know we are careering down the path of an effective quasi-monopoly in the context of Irish banking. The review must look at the potential of, for example, a third banking force, something we have spoken about very earnestly in this Chamber for many years now. That will be important as we try to build up the Irish banking sector and create a form of competition that we do not have at this point in time, which is impacting on businesses, job creation and the high level of mortgage interest rates that Irish consumers have to pay for a host of different reasons.

The review should also look at the prospect of introducing a real and sustainable public banking model in this country, which is an issue we have shied away from. Over the last few years, many reports have been generated about the prospect of establishing a public banking model based on the German Sparkasse model. Dare I say it, only lip service has been paid to it. I was disappointed that during the term of the Labour Party in government from 2011 to 2016 that particular proposition did not evolve to any great degree. A report was done and sent to Ministers and it was essentially dismissed. I believe that model has some potential. It works elsewhere.

I am pleased the Minister of State, Deputy Fleming, referenced the credit union sector and the potential for it to grow, evolve and play a much more fundamental role in banking as we know it in this country. Banking will change. There are huge opportunities for innovation in this space as well, the kind of innovation that people have already adapted to and are demanding more of. There are some really exciting developments in Irish fintech as well. Irish start-ups and SMEs are very active in that area.

I am pleased the Minister has reported to the House that he will shortly publish the heads of the Bill to give effect to his commitment on the senior executive accountability regime.

I look forward to engaging with the Minister and his colleagues on that.

Problems with regard to trust in the Irish banking system were mentioned earlier on. I have had very positive engagement with the Irish Banking Culture Board on that particular issue. Accountability is important. It is not just corporations that make decisions that impact on our lives, but individuals. There needs to be a proportionate regime to make individuals in senior positions accountable for the decisions they take in our banking and finance sector.

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