Darragh O'Brien (Fianna Fail) | Oireachtas source

I welcome the insertions and I commend Senator Gilroy on raising this point on Committee Stage. I am on the record as opposing the pillar banks approach because I thought we missed an opportunity by subsuming EBS into AIB as outside investors were interested in doing that. Competition will be the issue. The Minister's amendment attempts to entice competition into the market. The only other bank which is expanding in Ireland is KBC, a Belgian bank. It is opening new branches and is beginning, tentatively, to lend in the first-time buyer market. It is not operating in the commercial and business sector and that is a problem. The past few years have seen massive changes in the banking sector and this Bill will create further changes. I agree these two amendments are important. I think the EBS is now effectively dead. It was the largest lender to first-time buyers even in the period 2009 to 2010. It is finished now and it has no real lending capacity in any shape or form. The credit unions have also been reined back - correctly so in some instances and not so in other instances. Many businesses were obtaining loans from credit unions but their lending have been restricted.

I hope that in ten years time we will not rue the day when we did not sell EBS in late 2010, early 2011, when the deal was done. The Minister for Finance, Deputy Noonan, for his own good reasons, decided to subsume it into AIB and to create, in his view, two strong banks, Bank of Ireland and AIB. However, Senator D'Arcy is correct. Ulster Bank is shutting down 41 branches and reducing its activity in the market. I suggest that if it were not for its technical IT issue over the past year, the bank would have announced these closures earlier, perhaps one year ago. That is what former colleagues of mine in the market tell me. We will need to be very careful to see what decisions Ulster Bank will make. I refer to the comments of the Chancellor of the Exchequer that Ulster Bank had to be propped up by the British Exchequer and that British banks should concentrate their business. We need to watch very carefully with regard to Ulster Bank's future in the Republic.

I agree that these are sensible amendments which are needed. I wish to put on the record of the House my opposition at the time to the pillar banks approach. I hope I am wrong and I hope we will see competition in the market because it is desperately needed.