Finian McGrath (Dublin North Central, Independent)
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136. To ask the Minister for Finance if he will provide an update on the debate on the re-introduction of public banking, and the need for alternative to private profit maximising commercial banks which control the credit supply; and if he will make a statement on the matter. [25402/15]

Michael Noonan (Limerick City, Fine Gael)
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Officials in my Department are currently considering a proposal concerning the introduction of local public banking.  Such a concept may potentially complement Government policy in a range of areas such as improving competition in the banking market, augmenting competition and innovation in the SME finance market and  regional development.  

Local Public Banks, which are prevalent particularly in Germany, with a mandate to focus on the needs of residents and SMEs in their regions rather than profit maximisation have the potential to drive competition and innovation in the retail banking industry.  Much like the Strategic Banking Corporation of Ireland's (SBCI) profit business model, they seek to be profitable but not to maximise that profit.  Other institutions operating in the Irish credit market such as credit unions are not profit maximising entities but have a key role to play in providing access to credit and other important services in local communities throughout the country.

As the Deputy will be aware, the Government has to date delivered a number of initiatives that already increase access to finance for SMEs such as the SBCI,The Supporting SMEs Online Tool, The Credit Guarantee Scheme, Microenterprise Loan Fund, Local Enterprise Offices and The Credit Review Office.  The Department is considering how a local public banking concept, with a focus on supporting SMEs, could complement initiatives already in existence.

The Government remains committed to the SME sector and sees it as the key engine of ongoing economic growth.  Consequently the Department of Finance, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit with a view to taking appropriate actions as warranted to ensure that SMEs in Ireland have the opportunity to reach their full potential in terms of growth and employment generation.