asked the Minister for Finance if he will introduce legislation to bring the banks and other financial institutions under parliamentary scrutiny in a manner similar to that for State-sponsored bodies.
Ceisteanna—Questions. Oral Answers. - Banks Parliamentary Scrutiny.
13.
(Clare): I do not propose to introduce legislation for the purpose suggested by the Deputy.
Does the Minister feel the present situation is satisfactory when the only form of public scrutiny of the operations of the banks seems to be through the Central Bank? They are responsible for the soundness of the currency. They are not charged with the important social issues raised by banking, such as the fairness of margins and the procedures used for rationing funds. Would it not be more appropriate that public representatives should have an opportunity to examine these aspects?
(Clare): The Oireachtas Committee cannot examine the Central Bank. Any change with regard to the private sector would run into serious trouble. The committee would have to get the accounts and call staff before them. It would run into serious trouble. As I have said, we have no plans at the moment to legislate for that purpose.
Is it not the function of the Central Bank to do precisely what the Minister said, to get these accounts and examine them in the public interest? Under the present regulations, the scope for inquiry by the Central Bank is very narrow. Many of the issues which concern the public are not getting a proper airing.
(Clare): I understood that the Deputy meant an examination by an Oireachtas Committee. The Central Bank have their own functions with regard to the associated banks. The Central Bank were not subjected to examination by previous Oireachtas Committees.
Is the Minister saying his objection to this very sensible proposal is related to difficulties on practical grounds rather than to a question of principle?
(Clare): It would present many difficulties to enact such legislation in the private sector. The Central Bank have a function in relation to the banks, and I am sure they carry out that function properly.
If it could be shown that these difficulties could be faced and overcome, as happened in other countries, would the mind of the Minister and the Government be open to what has been proposed?
(Clare): That is a matter for the Government to consider.
Does the Minister regard it as satisfactory that banking services are exempted specifically from the scrutiny applied to other aspects of the private sector in regard to prices under the Prices Acts and restrictive practices under the Restrictive Practices Act? Does he regard it as satisfactory that the only control over them is exercised by the Central Bank on whose board they have substantial representation?
(Clare): That is a matter of whether or not you trust the board of the Central Bank. I would have thought that the Central Bank have functioned very properly in this respect over the years, and I have no doubt they will continue to do so.
Would the Minister not agree that it is not a question of whether they have done their duty according to their lights, but whether their lights are correct? Statutory powers are vested in people who have responsibility for eliminating restrictive practices and preventing excessive charges. Like other aspects of the private sector the banking sector should be subject to the same controls in regard to price increases and restrictive practices to which other areas of the private sector are subject.
(Clare): I am not aware of which areas the Deputy has in mind.
I can assure the Deputy that the banks are exempt from requirements in regard to price increases under the Prices Acts and restrictive practices under the Restrictive Practices Acts to which other areas are subjected.
Ceist 14.
(Clare): We are no different from most other countries in that respect.
Would the Minister not agree that in an area like this it is important that justice should not only be done but should be seen to be done and that public confidence should be maintained in the integrity of the system? There is public concern in a situation in which the banks are exempted from the normal controls applicable to the rest of the private sector and are controlled only by the Central Bank on whose board they are represented. It does not involve any reflection on that board to suggest that public disquiet can exist when that situation is there and is allowed to continue, and when no action is taken about it which would restore and maintain public confidence in the system.
(Clare): As the Deputy is aware, the Central Bank are controlled by existing legislation.
That has nothing to do with the question. Could I have an answer to my question?
(Clare): I am not aware of widespread concern in any form with regard to the activities of the banks. I am confident that the Central Bank do their job in a proper manner.
Would the Minister accept that I did not talk about widespread concern about the operations of the bank, but about a system in which there is self policing and in which there is not seen to be the kind of external adjudication which exists in regard to restrictive practices and pricing for the rest of the private sector. That is the question.
(Clare): I have taken a note of the Deputy's point.