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

46. To ask the Minister for Finance his views on developing a public banking model here similar to the model (details supplied) in Germany; and if he will make a statement on the matter. [50799/17]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy will be aware, the Programme for Government commits the Government to "thoroughly investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions". My Department and the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs, now the Department of Community and Rural Development, are the Departments responsible for fulfilling this commitment.

Local public banking is where a state, or other public body, has ownership of a financial institution. In Germany, Sparkassen (local public banks) operate in specified regions and their aim is not profit maximisation but rather promoting the interest of the public stakeholder, economic development and financial inclusion. Irish Rural link and SBFIC suggested a similar ethos for Irish local public banks in their proposal.

The investigation of local public banking has consisted of a consultation process with stakeholders and interested parties. It has also included an analysis of a detailed proposal for a possible model of local public baking in Ireland. This proposal was put forward by Irish Rural Link and the Savings Banks Foundation for International Cooperation (SBFIC), the international development wing of the Sparkassen group.  There have been a number of meetings between their representatives and my officials.

Officials in my Department have been working jointly the Department of Community and Rural Development in order to prepare a report of the investigation of local public banking. This report will outline the current banking environment in Ireland, describe the Sparkassen business model, analyse a proposal for local public banking in Ireland, summarise the view of respondents to the public consultation process and set out findings in relation to the potential for a local public banking model in Ireland.

The purpose of the consultation process and report is to assist the Government in its analysis of local public banking in an Irish context. The report is currently being finalised and I expect to receive it imminently. Along with my colleague, Minister for Rural and Community Development, Michael Ring T.D., I will bring the report to Government, for approval. I would like to advise the Deputy that I expect we will be in a position to do so before Christmas.