asked the Minister for Finance if he will specify for those financial institutions for which he is responsible: (1) the legislation under which they are regulated or supervised by his Department; (2) the principal prudential ratios and requirements to which they must conform, for example, capital, reserve and liquidity; (3) the concessionary taxation arrangements vis-ávis other financial institutions; and (4) the frequency of reporting, auditing and inspections by his Department.
Written Answers. - Financial Institutions' Legislation.
30.
The information requested by the Deputy is set out in the Tables attached. The bodies in question are the ICC, ACC, and Foir Teo, which are State bodies, Irish Life, in which the Minister for Finance has a 90 per cent shareholding, the Trustee Savings Banks and Post Office Savings Bank, in respect of which the Minister has certain statutory powers, and the Central Bank.
(i) INDUSTRIAL CREDIT CORPORATION.
1. Legislation.
Industrial Credit Acts, 1933 to 1983.
2. Ratios.
None.
3. Concessionary taxation arrangements.
None.
4. Reporting, auditing and inspection.
Section 11 (1) of the Industrial Credit Act, 1933, as amended requires the ICC to furnish to the Minister a duly audited balance sheet and profit and loss account within 90 days of the end of each accounting year unless that period is extended by the Minister. The company also supplies an annual report by the chairman on its activities during the year.
As well as these requirements, the Government decided last December that more stringent reporting arrangements would henceforth be applicable to State bodies: details were given to this House by the then Minister for Finance on 16 December 1986. As reports at columns 3104 and 3105 of the Official Report.
(ii)AGRICULTURAL CREDIT CORPORATION.
1. Legislation.
Agricultural Credit Act, 1978.
2. Ratios.
None.
3. Concessionary taxation arrangements.
Under section 79 (3) (d) of the Corporation Tax Act, 1976, a special rate of 35 per cent is applied to the ACC. (The same rate applies to building societies.)
4. Reporting, auditing and inspection.
Under section 16 of the Agricultural Credit Act, 1978, ACC must present their annual accounts to the Minister for Finance.
(iii) FÓIR TEORANTA.
1. Legislation.
Fóir Teoranta Acts, 1972 to 1983.
2. Ratios.
None.
3. Concessionary taxation arrangements.
None.
4. Reporting, auditing and inspection.
Section 16 (2) of the Fóir Teoranta Act, 1972, as amended, requires the annual submission of Fóir's audited accounts, including the balance sheet and profit and loss account, to the Minister. Section 17 (1) of the same act requires the company to make a report to the Minister, in respect of each accounting year, of its activities during that year.
(iv) IRISH LIFE ASSURANCE PLC
1. Legislation.
Irish Life, and all other authorised life assurance companies, are supervised by the Minister for Industry and Commerce under the Insurance Acts, 1909 to 1985, The European Communities (Life Assurance) Regulations, 1984 (SI No. 57 of 1984) and the European Communities (Life Assurance) (Accounts, Statements and Valuations) Regulations, 1986 (SI No. 437 of 1986).
2. Ratios.
The principal prudential ratios and requirements are set out in detail in the 1984 and 1986 regulations mentioned above.
3. Concessionary taxation arrangements.
Irish Life does not receive any concessionary tax treatment vis-á-vis other life assurance companies in the State.
4. Reporting, auditing and inspection.
Supervision of Irish Life is exercised by the Minister for Industry and Commerce under insurance law. Irish Life publish accounts under the Companies Acts: the accounts are audited in accordance with those Acts. Reports and accounts are also furnished under the Insurance Acts.
(v) TRUSTEE SAVINGS BANKS.
1. Legislation.
Trustee Savings Banks Acts, 1863 to 1979.
2. Ratios.
The Trustee Savings Banks must hold 80 per cent approximately of their resources in the form of deposits with the Minister for Finance and in addition are required to maintain a prudent level of primary liquidity. Their deposit rates are determined by the Minister for Finance.
3. Concessionary taxation arrangements.
The Trustee Savings Banks are liable for corporation tax on their profits under the Corporation Tax Act, 1976, subject to the provisions of section 337 of the Income Tax Act, 1967, and section 41 (8) of the Finance Act, 1968, under which these banks are exempt from tax in respect of interest and dividends arising on deposits with the Minister for Finance. This arrangement helps minimise the management expenses payable by the Minister to these banks.
4. Reporting, auditing and inspection
These banks employ private-sector auditors to audit their annual accounts which are published. In addition section 31 of the Finance Act, 1940, provides for the inspection of the Trustee Savings Banks by persons nominated by the Minister for Finance. Inspections take place on an ongoing basis and the banks also make weekly reports on their operations.
(vi) POST OFFICE SAVINGS BANK.
1. Legislation.
The Post Office Savings Banks Acts, 1861 to 1958, and the Postal and Telecommunications Act, 1983.
2. Ratios.
The Post Office Savings Bank is a deposit-taking institution only and the rate it pays on deposits is determined by the Minister for Finance. All of its deposits are invested with the Minister.
3. Concessionary taxation arrangements.
The profits of the Post Office Savings Bank Fund are available to the Minister for Finance under section 19 (i) of the Finance Act, 1930, and there is no taxation requirement on these profits.
4. Reporting, auditing and inspection.
Section 13 of the Post Office Savings Bank Act, 1861, requires that the annual accounts of the Post Office Savings Bank be audited by the Comptroller and Auditor General. In addition An Post reports monthly on the operations of the Post Office Savings Bank to the Minister for Finance.
(vii) CENTRAL BANK OF IRELAND.
1. Legislation.
Currency and Central Bank Acts, 1927 to 1971.
2. Ratios.
The Central Bank must maintain the Legal Tender Note Fund, and a Currency Reserve in the General Fund. The first two of these are maintained for purposes of the currency while the General Fund is the bank's operating fund.
3. Concessionary taxation arrangements.
The Central Bank is exempt from direct taxation and certain stamp duties. However, under the Central Bank (Surplus Income) Regulations, 1943, the surplus income of the bank, after allowance is made for depreciation and appropriations (of not more than 20 per cent) to a general reserve and 15 per cent of wages and salaries to the superannuation reserve, is transferred to the Exchequer.
4. Reporting, auditing and inspection
Under section 35 (2) of the Currency Act, 1927 (as adapted), the Central Bank is required to transmit a statement of its accounts to the Comptroller and Auditor General, who is, in turn, required to furnish the audited accounts and his report thereon to the Minister for Finance for presentation to the Dáil. Section 36 of the Currency Act, 1927, requires the Central Bank to prepare and send to the Minister for Finance a report of its proceedings every year within six months of the end of the year and requires the Minister to present the report to each House of the Oireachtas.