Written answers

Thursday, 14 June 2018

Department of Finance

Community Banking

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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64. To ask the Minister for Finance his views on the report on community banking; the reason for the delay in publishing the report; if the delay is being caused by a disagreement between his Department and the Department of Rural and Community Development on the content of the report; if so, the points of disagreement; if the publication of the report will be expedited; and if he will make a statement on the matter. [26067/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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My Department, along with the Department of Rural and Community Development, are responsible for the task of fulfilling the Programme for a Partnership Government commitment to "thoroughly investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions".

Local public banking is where the state, or another public body, has ownership of a bank or other financial institution, as opposed to private ownership. In Germany, local public banks are called Sparkassen. The way the local public banking system is structured means that Sparkassen may only operate in specific geographic regions. This means that the lending activities of Sparkassen are confined to a particular local area. The aim and philosophy of Sparkassen is promoting and encouraging regional economic development and financial inclusion rather than solely profit maximisation. An important part of the business model of Sparkassen is working closely and building relationships with local small and medium sized enterprises to support the local regional economy.

As the Deputy will be aware, officials in both departments have been working closely together to conduct a thorough investigation of local public banks in Ireland, based on the German Sparkassen model. This investigation included a consultation process with stakeholders and interested parties. Additionally, there has been substantial engagement with Irish Rural Link and the Savings Bank Foundation for International Cooperation (SBFIC), the international development wing of the Sparkassen Group. As a result, the report contains an analysis of a proposal from these bodies for a possible model of local public banking in Ireland, which is based on the Sparkassen model.

Following considerable analysis by officials, my colleague, the Minister for Rural and Community Development, Michael Ring T.D., and I have taken time to carefully consider the completed report on local public banking. I am satisfied that a thorough analysis was undertaken by officials. Minister Ring and I circulated the report to all Government departments before jointly submitting it to Government at a Cabinet meeting in May.

I am pleased to inform the Deputy that the report has now been approved by Government and I anticipate that it will be ready for publication in the near future.

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