asked the Minister for Finance how the minimum ratio of assets to sums for lending is regulated in the banking business.
Ceisteanna—Questions. Oral Answers. - Banks Assets and Loans Ratio.
12.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 11 and 12 together.
I am satisfied that the Central Bank's powers of licensing and regulating banks are generally adequate. Experience since the enactment of the 1971 Act, however, has highlighted the desirability of strengthening these powers, particularly in relation to the protection of depositors. As I previously indicated to the House, proposals for this purpose are being examined in my Department with a view to introducing amending legislation.
The Central Bank has specific powers under section 23 of the Central Bank Act, 1971, to require banks to maintain prescribed ratios between assets and liabilities. While it has not found it necessary to formally invoke these powers it has imposed liquidity ratios on all banks for monetary policy purposes. In addition, it has set out licensing and supervisory criteria which contain a number of other ratios of a prudential nature to which banks are expected to adhere. These criteria were last revised and published in the Bank's Annual Report for 1975 and I am arranging for copies to be placed in the Dáil Library. They can be made the subject of a condition attached to a licence under section 10 of the Act where this is considered necessary or desirable in the case of any bank or banks. All ratios are supervised by the examination of regular returns from banks and by bank inspections.
Will the Minister state if any case has been brought to the attention of the Central Bank where a particular licensed bank was not operating within the guidelines set down and the conditions attaching to the licence?
I am not aware of any such case, other than of some cases that are of public knowledge.
Is there regular monitoring by the Central Bank of the activities of the banks?
There is, on a regular basis—I think a monthly basis.
If I were to bring a particular case to the attention of the Minister will he have it investigated?
Certainly I will.