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Dáil Éireann debate -
Tuesday, 27 Jun 1978

Vol. 307 No. 12

Ceisteanna—Questions . Oral Answers . - Overseas Investment .

9.

asked the Minister for Finance if he has seen an advertisement for merchant bankers (details supplied) in which they make their services available for the investment of Irish capital overseas; and if his Department have any proposals for the monitoring of the investment of such capital.

: I have seen the advertisement. Controls on investment of the type in question are exercised by the Central Bank on behalf of the Minister for Finance to ensure that there is no reduction in the amount of domestic funds available for investment in Ireland.

: Could the Minister indicate whether or not the permission of the Central Bank will be necessary before any funds can be invested abroad on foot of an advertisement such as that referred to in the question?

: Yes, it would be.

: Can the Minister say if he has given any direction to the Central Bank or made his feelings known to them in regard to the export of capital of this kind and whether he would propose to do so?

: No, because there is no export of capital involved. The mechanics by which it operates do not result in any outflow of capital. Perhaps I should explain: there is a deposit made in Irish pounds equivalent to the amount being borrowed abroad. An account is opened in respect of that and the bank concerned then borrow in the foreign currency the equivalent amount. There is no outflow of Irish capital.

: Will the Minister clarify the matter? Even though there is no outflow of Irish capital as such, is it not the case that the interest on the foreign borrowings will have to be paid for by Irish funds and that this represents an outflow?

: I understand that in certain cases there can be an actual small inflow involved because of the way the operation works mechanically. Certainly there is no loss and it is subject to the approval of the Central Bank.

: Will the Minister state if the Central Bank publish figures of the amount of capital that may leave the country as a result of this or other capital investment schemes?

: As I have indicated to the Deputy, capital does not leave the country as a result of this kind of scheme. With regard to other statistics published by the Central Bank, I would have to refer the Deputy to the quarterly and annual reports of the Central Bank that are laid on the Table of the House.

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