Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

87. To ask the Minister for Finance to outline the progress made on implementing the programme for Government commitment to thoroughly investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions; and if he will make a statement on the matter. [29592/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy is aware, the Programme for Government contains a commitment to investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions.  Previously, in 2015, the Sparkassenstiftung für Internationale Kooperation (Savings Banks Foundation for International Cooperation - SBFIC), with the support of the Public Banking Forum of Ireland, submitted a proposal to the Department of Finance regarding the development of a local public banking system in Ireland. The proposal was considered in detail by officials in my Department and it was not clear, at that time, how local public banks could create a distinct product offering that would avoid replicating the significant regional and national supports that had already been put in place by the Government to support the financing needs of SME.

The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs (DAHRRG) are the lead department in respect of the current Programme for Government commitment and, as the department with primary responsibility for this matter, they are now tasked with considering the issue further. The Department of Finance will, of course, be available to assist the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs as it investigates this matter.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

88. To ask the Minister for Finance if he will provide an update on the potential risks to the Irish banking sector and the economy as a whole given the recent issues facing a bank (details supplied) and the wider instability in the European banking industry; his views on whether this is likely to affect the financial performance of Irish banks, and, if so, the extent to which progress has been made on a European level in enhancing a stronger European regulatory framework; and if he will make a statement on the matter. [29597/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It would not be appropriate for me to comment in detail on media speculation concerning the performance of an individual foreign bank.

However, I can assure the Deputy that both my Department and the Central Bank are monitoring the situation very closely in collaboration with our EU colleagues.  In that respect my Department is not aware of any material financial exposure on the part of the Irish banks to the bank in question.

The Irish Banks are obviously impacted by a lot of the issues facing the European banking sector generally, including the low interest rate environment, weaker loan growth, increased regulatory costs, and the fallout from the UK referendum on membership of the EU. However, notwithstanding these headwinds, the underlying financial performance of the Irish banks has continued to remain strong throughout 2016. Nevertheless, the impact of the challenges that I have cited has clearly been reflected in the weakness and volatility we have seen in the share price performance of the Irish banks and across the sector.

It should also be noted that all significant banks in the EU are covered by comprehensive common supervisory, recovery and resolution regimes for ensuring long term financial and economic stability across the Union.  These Banking Union regimes, have created greater separation between the banking system and sovereigns, which is important in terms of limiting the impact of banking sector difficulties on taxpayers.