Dáil Éireann debate -
Tuesday, 7 Jul 1992

Estimates 1992. - ICC Bank Bill, 1992: Second Stage.

Mr. B. Ahern

I move: "That the Bill be now read a Second Time."

The main purpose of this Bill is to provide for the continued development of the Industrial Credit Corporation plc. It allows for an increase in the amount of borrowings which the corporation may undertake. The Bill also provides for a change in the name of the Industrial Credit Corporation to ICC Bank plc., for the supervision of the company by the Central Bank, for revised principal objects of the company, for the company to amend their memorandum and articles of association to accord with the changes in the Bill, and for some technical matters.

The ICC's current borrowing limit of £1,000 million, which is also the amount which may be guaranteed by the Minister, has almost been reached. This limit was introduced under the terms of the Industrial Credit (Amendment) Act, 1990. I should point out that borrowing includes deposits with the company, along with borrowing in the normal sense. Up to now, all such borrowing has been guaranteed by the State. The Bill provides for an increase in the borrowing limit to £1,300 million, but leaves the guarantee limit unchanged at £1,000 million.

The Bill marks a departure, therefore, in that the increased amount of £300 million in ICC's borrowing powers will not be guaranteed by the State. It reflects the policy which has been in operation for some years of reducing the Exchequer's exposure through guarantees to commercial State bodies in so far as that can be achieved. Steps will be taken by the ICC to ensure that the two types of borrowing will be clearly segregated and identified by lenders and depositors. I wish to make it clear that there is no change in relation to existing lenders and depositors with the ICC; their funds continue to be fully covered by the State guarantee already in place.

Before dealing with the detailed provisions of the Bill, I would like to give the House an indication of developments in relation to the corporation since 1990, when a Bill to increase the ICC's borrowing limits was last before this House.

The ICC have been developing along satisfactory lines. They have enjoyed a consistent run of profitability since their incorporation and have paid dividends to the Exchequer over many years. After tax, profits in 1991 were £5.86 million and dividend payments increased from £1.4 million to £1.8 million. Their assets amounted to over £1 billion at the year end. The ICC recently published their half year figures, which showed a steady performance in profits after tax of £3.27 million, and a continuation of their interim dividend, yielding over £700,000 to the Exchequer. The chairman stated at the release of these figures that he expected a satisfactory outcome for the year, in the absence of unforeseen circumstances.

The ICC recently withdrew from activities which were not providing an adequate return, such as hire purchase, leasing and fund management. They are now concentrating on their core activities, term lending and trade finance to small and medium size business, treasury, including foreign exchange, and venture capital. In addition, they will continue their involvement as an adviser in corporate finance activities. The ICC are adopting a prudent approach to the growth of their assets — rather than a push for growth, they are concentrating largely on working their existing assets to maximum effect. I am confident that the trend towards full commerciality of the ICC which has been ongoing for some time, will continue under the direction of the new chairman, whom I recently appointed. The provisions of this Bill will help the corporation to maintain their present, steady progress and enable them to meet the challenges of the post-1992 situation in the financial services area.

My predecessor announced in May 1990 that he was inviting firms to tender for a consultancy assignment on the future options available in relation to the ICC. Subsequently, the consultants reported that ICC would require additional capital in the years ahead which would not necessarily be available from the Exchequer and, without which, the future development of the company could be restricted. They found that there was no compelling strategic reasons for the continued retention of the shares in ICC in State ownership. They, therefore, recommended that the Minister should sell his entire shareholding in ICC. The Government accepted that the option of a sale of the State's shareholding in ICC should be explored further, and the consultants were employed — on a no sale no fee basis — to assess the prospects for a sale. However, no suitable purchaser of the State's shares in ICC has emerged so far. I am keeping the matter under review.

There have, of course, been some significant developments in the State banking sector since legislation relating to the ICC was last before this House. The Trustee Savings Banks have now amalgamated. Legislation extending,inter alia, the areas of business that ACC can engage in was passed earlier this year. It will be obvious that the main sections of this Bill follow closely the lines of the ACC Bank Act, 1992. It is important to recognise, however, that there is still a substantial difference between the ICC and the ACC Bank in that the former is a merchant bank concentrating on the business sector, with few retail outlets, whereas the ACC Bank is now largely a retail bank with a traditional concentration on the agricultural sector.

There have been suggestions that the State's banking activities should be amalgamated, and perhaps sold to the private sector. A simple merger of the ACC and the ICC has also been suggested. I am keeping the various options available to me under review. All I can say at this stage is that I am not ruling out any particular course of action, including a sale of ICC, should a suitable purchaser emerge.

I have already referred to the fact that the increase in the borrowing limit of £300 million provided for in this Bill will not be guaranteed by the State. Following the enactment of the Industrial Credit (Amendment) Act, 1990, my Department in conjunction with ICC undertook an examination of this question in so far as it relates to the corporation. As a result of this examination, I am satisfied that the corporation can — and indeed should — tap the market for unguaranteed deposits. I wish to repeat that the position of depositors and lenders who already have funds with ICC is not affected by this change.

ICC propose to establish a subsidiary company following the passing of this Bill, which will take deposits on an unguaranteed basis from the outset. Deposits with the parent company will continue to be guaranteed within the limit of £1 billion. In this way, ICC will distinguish clearly between deposits which are guaranteed by the State and those which are not guaranteed. This arrangement will enable ICC to continue its normal business, but its further growth will be funded from the new unguaranteed deposits through the proposed new subsidiary. The ICC will underpin the subsidiary with its resources. This is clearly a substantial change compared with previous practice. However, I am confident that ICC is now in a sufficiently strong position to adapt successfully to the new position. An approach based on not guaranteeing the increase in borrowing was called for by some Deputies during the course of the debate on the 1990 Act.

I now turn to the provisions of the Bill.

Section 1 is the definition section and is self explanatory. Section 2 provides for a change of name of ICC to ICC Bank plc. The use of the word "bank" in ICC's title serves to emphasise its commercial orientation. It is seen as helpful from a marketing and development viewpoint. Also, in international terms, it is desirable that the word "bank" be used for ease of recognition.

Section 3 provides for the application of certain supervisory provisions contained in Central Bank legislation to the ICC at a date, or dates, to be determined by ministerial order and after consultation with the Central Bank. The supervisory provisions will be administered by the Central Bank itself; in other respects I, as Minister for Finance, will continue to exercise my existing functions with regard to ICC. The proposed Central Bank supervision is in line with Government policy in this area, namely, that given the small scale of resources available for financial supervision of deposit-taking institutions in Ireland and given EC requirements for the regulation of financial markets, it is appropriate that a body such as the ICC should come within the prudential supervision of the Central Bank. This provision is similar to a provision in the ACC Bank Act, 1992. The change has already occurred in the case of the Trustee Savings Bank and building societies, and is part of the consolidation process that is required by the imminent completion of the Internal Market in financial markets with its attendant increase in competition. ICC is fully supportive of this new relationship with the Central Bank and sees it as an essential step on the way to becoming a competitive banking institution subject to the same rules and regulations as the other credit institutions supervised by the Central Bank. ICC has for some time now been submitting financial reports to the Central Bank on an informal basis similar to those which the bank requires of other credit institutions.

Section 4 is concerned with making explicit the powers of the corporation to engage in normal, modern banking and financial transactions and to provide associated services. The existing principal objects of ICC date back to the 1933 Industrial Credit Act which established the corporation, as amended in the 1971 Industrial Credit (Amendment) Act. These provisions required that the principal objects of the company should include dealings of the corporation with trade or industry in the State. There will be no change in ICC's traditional role as a merchant bank primarily for the small and medium sized indigenous business sector except that the scope of its operations will be somewhat enlarged. The section also provides that the exercise of the revised objects may be made subject to such conditions or limitations on amounts as may be determined by the Minister for Finance or the Central Bank, as appropriate.

The section is similar to section 5 of the ACC Bank Act, 1992. Given that both State banks are expected to operate on a commerical basis, and that both will be subject to Central Bank prudential supervision, it is desirable that similar principal objects should apply to both banks.

Section 5 provides for an increase in the borrowing powers of the ICC from £1,000 million to £1,300 million. The last increase was in 1990, and the increase now proposed should last for a number of years, given ICC's concentration on existing assets, rather than the pursuit of asset growth.

Section 6 requires the ICC to amend its Memorandum and Articles of Association to bring them into line with the provisions of this Bill.

Section 7 is a technical measure which extends the scope of the Bankers' Books Evidence Act, 1879, as amended, and the Bills of Exchange Act, 1882, as amended, to ICC. These Acts already apply to banks and building societies, and to ACC Bank, and it is desirable that ICC should be covered similarly. The first part of the section relates to the acceptance of bank records as evidence in the courts, and the second part to the rules relating to bills of exchange, cheques and promissory notes.

Section 8 gives the short title, collective citation and construction.

I commend this Bill to the House.

Mr. Noonan

(Limerick East): I wish to signal that we will not be opposing the Bill as it is not controversial and similar Bills have gone through the House quite frequently increasing the ceilings for bodies such as the ICC.

I should like to raise a number of issues with the Minister in my brief contribution. I note that the Bill provides for an increase in the borrowing limit to £1,300 million but leaves the guarantee limit unchanged at £1,000 million. This means that the extra £300 million will no longer be guaranteed. What is the present level of all State guarantees for the State commercial sector? Does the policy of disengagement from guarantees apply to all semi-State organisations or do some of them still have a role in relation to guarantees?

The Minister said that he had an open mind in relation to the future structure of ICC, whether it will remain as a State bank, amalgamate with the ACC or be sold to a willing buyer. He also said that no suitable purchaser of the State's shares in ICC has emerged so far. Will the fact that such a large element of the finances of ICC will no longer be guaranteed affect the price? Is it the intention in the consultants' recommendation to which the Minister referred, to transfer the guarantee to the private sector or was it part of the recommendation that if ICC was privatised the guarantee would not transfer and that the State would shed the underpinning of £1 billion to ICC?

I am also glad that ICC — like ACC — are now being brought under the regulatory control of the Central Bank, which is consistent with a number of measures which have been brought in here over the last number of years. It would be unusual if this had not been done. Will the Minister comment on the arrangements made for ICC to look after the former Fóir Teoranta portfolio? What kind of agency arrangements exist there now, will they be affected in any way by the provisions of this Bill?

I would like the Minister to comment on a matter that is raised frequently and which I am sure is familiar to Deputies on all sides of the House. I constantly meet business people who tell me they are unable to obtain venture capital, that the banks are operating a policy where they will only support a venture if it is backed by fixed assets, but they will not finance a business idea. Venture capital, in the narrowly defined sense of the word, is no longer available in this country. These people have argued that the arrangements the Minister is now making for special deposit accounts to ensure that the yield from DIRT tax does not evaporate as money moves out of the country in January 1993, is putting a further strain on the provision of venture capital. However, some banking people do not agree with this. They claim there is money available for good commercial propositions, that there is no shortage of money but that there is just a shortage of good commercial propositions. I would like the Minister to adjudicate on this issue as I have heard both sides of the debate and this is a matter that comes up quite frequently. I would like to hear the advice of the Minister, his officials and the Central Bank in this regard. If venture capital is not available, that is a serious undermining of the Government's programme and of the ambitions most politicians would have for a modern industrialised Ireland. I have failed to understand this matter and I would like the Minister to cast some light on it.

I would like the Minister to explain in further detail the necessity for the ICI to form a subsidiary company for any non-guaranteed portion of their business. Is this not maintaining an artificial distinction into the future? Is there any necessity for such arrangement? Surely if a bank is to be a normal commercial merchant bank under the control of the Central Bank they can be corporately unified. The issue of State guarantees should not necessarily undermine the position of the bank in any way with the requirement that any non-guaranteed portion of business that has been added on by way of ceiling would have to be arranged by way of a subsidiary company. What is the necessity for this? I would like to assure the Minister we will be supporting this Bill, and I do not intend to delay him unduly tonight.

Mr. Quinn

I have a number of questions to put to the Minister in relation to this Bill which is being presented as a minor technical adjustment in the operations of the ICC, but really the issue is much bigger than that. The Minister is reluctant to reveal to the House the serious range of options that must, one would hope, be before him and his officials in the Department of Finance. We are talking about preparing yet another element of the State's ownership of the financial credit institutions and bringing it into line with their sister bank, the ACC bank, so that various options which have been put to the Minister and which he recognised on 1 April 1992 when we had a debate in the House on the ACC Bill can be considered. I am disappointed that the Minister, in his speech, has been extremely careful not to show his hand in relation to the attitude of the Department of Finance regarding the possible future of the ICC in any shape, size or form. We must act quickly on this matter. This economy desperately needs working capital. The small and medium sized enterprises are the bones and the engine of real sustainable job creation now, having regard to the way large companies, multinationals and Irish companies are not showing the capability to create or increase employment. The news from Waterford is a simple manifestation of that.

The large corporations are no longer creating real jobs and are certainly not responding to the size and scale of the employment problem. We have a major capital provision problem. The Government at one stage provided capital in different shapes, sizes and forms for enterprise formation, but have retreated rather dramatically from that activity. Our banking system was traditionally the source of a good deal of capital for the type of company I am talking about, what, in the Irish context, would be a small to medium sized enterprise with between five and 15 employees and turnover of somewhere between £150,000 to £300,000. Those companies depend on four banks and within the rules of the House, a Cheann Comhairle, I believe I am permitted to name them. They are, Allied Irish Banks, Bank of Ireland, Ulster Bank and National Irish Bank in that order. Allied Irish Banks, together with the Bank of Ireland, have about 80 per cent of the domestic market. Ulster Bank have approximately 12 per cent and a very vigorous player on the stage, National Irish Bank, are trying to bid up their own share. We have a duopoly of banks dominating the domestic market, certainly for the type of company I am talking about. They compete vigorously with each other. I am not suggesting in any way that they are a cosy cartel — their dominance, geographically and culturally, dare I say it, in the Irish economy is such that they effectively, notwithstanding their mutual competition, have such a dominant share in the Irish market that their concerns determine the availability of capital for small and medium sized enterprises. Unless the Government and the Minister for Finance can introduce some kind of third force in banking terms into the Irish economy in the foreseeable future, I do not see the type of enterprise to which we on all sides of this House are committed, having access at reasonable cost and risk to limited amounts of venture capital. In such circumstances we are not going to get the take off in job creation to which the Government, allegedly, are committed. I purposefully use that phrase because I know the Minister is personally committed, but we have to contrast the aspirations and the words with the deeds. The deeds are represented by a debate that took place here on 1 April last, also by a previous debate and now by a further debate this evening. The Minister for Finance has had another opportunity to indicate to this House his view in this regard, but we have got no indication as to his attitude or that of the Department of Finance in relation to these matters. We are not putting down these markers for the first time. These questions have hung in the air. The Minister, in reply to Second and subsequent stages of the debate on 1 April 1992 — column 306 of the Official Report — stated:

I will consider Deputy Quinn's suggestion, but if these companies were to amalgamate on the basis of a joint venture with another State company it would lead to rationalisation.

Earlier in his reply the Minister stated:

I find some of the alternative ways quite interesting. However, in answer to Deputy Bradford, having been in the Department of Finance for a matter of months I am not prepared to jump in a certain direction because somebody says that is the way to jump. The future of ACC is not predetermined, as has been suggested. My Department are aware of some of the possibilities to which Deputy Quinn in particular has referred. I assure the Deputy that all the options are open to the State and will be examined in due course. Some of the synergies referred to by the Deputy are quite interesting, but there is no question for a quick disposal for a quick buck. There is logic in some of the points made by the Deputy, but whether or not agreement could be reached with ICC and Trustee Savings Bank on these issues is another matter. I accept that these bodies are entities in their own right and that they are major employers who make relatively small profits. Unfortunately, one of the dangers of privatisation, whether within the State or without it, is rationalisation. The difficulty I have with privatisation — Deputy Rabbitte will have heard me say this on many occasions, both in Opposition and otherwise — is that it inevitably leads to rationalisation. In the case of Trustee Savings Bank, I pushed for amalgamation and signed the order two weeks ago allowing for that. There are about 800 people employed in that instance. In the case of ICC and ACC there are also many people involved, although these corporations may not make a great annual profit.

The Minister went on to make the point I quoted earlier. The Government are not slow in relation to rationalisation of the labour force. When Deputy Ahern became Minister for Labour in 1987 there was massive rationalisation of the public service. There is no ideological, cultural, emotional or personal reluctance on the part of Fianna Fáil in Government, either on their own or with the Progressive Democrats, to avoid the chalice of rationalisation, even if it leads to job losses. The proposals made by the then Minister, Mr. MacSharry, in relation to the costly reduction in the public service labour force had the support of the Cabinet, of which Deputy Ahern was a member. To respond to the idea of a third banking force by saying, as the Minister did on 1 April, that he did like the idea of job losses was a reasonable holding position, but three months later it will not stand. It is still a holding position. I am amazed that the Minister has not given the House the benefit of his thinking on this matter.

The dominance of AIB and the Bank of Ireland in the domestic market is causing hardship in the real world. Small companies have been unilaterally told by bank managers, who have apologised in advance, that their working overdraft provision of between £10,000 and £20,000 is being reduced on orders from head office. Bank managers are virtually admitting in some cases that they are in the hands of credit controllers, who are running the banks instead of marketeers or financiers. That is particularly true, it is claimed, of the Bank of Ireland. Directors of small companies are being told when they have productive ideas that in order to get the necessary capital they will have to pledge their personal belongings, including the family home. There is a demand from the banks for collateral of at least 100 per cent, and in some cases 150 per cent, to cover relatively small amounts of money. One of the reasons is that in those two banks in particular the centralisation of decision-making has removed the local judgment of the bank manager who has a working knowledge of the small company and the capabilities and commitments of the directors who make that company function.

An Ceann Comhairle

I am anxious that Deputy Quinn should not stray too far from the Bill before us.

Mr. Quinn

I will confine my remarks to the future of ICC. Its role will be to fill the gap being created by the activities of the two major banks to which I have been referring. They are being left alone in a duopoly which allows them to hold 80 per cent of the market. The State has the capability to cater for 20 per cent or 25 per cent of the total retail banking sector through four components, the ACC, the ICC, the enormous network of post offices and the Trustee Savings Bank, which is effectively State controlled, although nobody likes to admit it. Nobody is in any doubt as to who really calls the shots in relation to the control of the Trustee Savings Bank.

We are giving the Minister further powers to polish and prepare for the disposal of ICC, but no coherent strategy is being put forward by the Department of Finance. The absence of that strategy for the disposal of ICC must be considered in the light of the hardship being experienced in the financial markets. The secondary banks are dealing with financial refugees who have been driven into their arms either by the Bank of Ireland or by AIB. The leasing companies and the secondary banks are being asked to provide traditional banking credit facilities which would in the past have been offered by their friendly bank manager. The banking fraternity were recently regaled by an article about the absence of the friendly bank manager. He has been replaced by a computer without personal knowledge of the individual companies. The traditional bank manager had some knowledge of business and was able to act as a quasi legal and marketing consultant.

We are being asked to change the Industrial Credit Corporation into the ICC Bank. The ICC was set up at a time when venture capital was not available. It is moving away from that traditional position into mainstream banking. There is no indication in the Minister's speech as to what alternative mechanisms will be put in place to fill the role which ICC was originally established to play. He must be getting reports from the marketplace on the perception of small and medium businesses of their relationships with the two main banks. The other two banks are active in the market but their shares at 8 per cent and 12 per cent are not as representative, given their geographical spread, as those of the two major banks who have 80 per cent of the market.

The future role by ICC must be considered against a deteriorating background. Since I spoke here on 1 April I have been told by various financial experts that my proposals have some merit and they hoped there would be a response from the Government because of the deteriorating position. The absence of a serious third banking force in the economy is a major impediment to economic growth and to job creation. The reluctance of the Minister for Finance to respond to two public invitations from me in this House to indicate his thinking on these matters is inexplicable. I invite him when replying to this debate to give such an indication. Many people are anxious to know, including more than 800 staff in ICC who want to know what their future is.

When ICC was first offered for sale, 50 prospectuses were circulated by Stokes Kennedy Crowley Corporate Finance who had the contract to dispose of the company. That first offer found no takers. The view expressed informally was that ICC was over staffed and was not saleable. I know that ICC are committed to this Bill and welcome its provisions. They have improved their productivity and efficiency in recent times. One of the business newspapers recently carried an interview with my namesake who is the chief executive of the company. He is not related to me. That individual in question, the company and the management have certainly improved the performance of ICC but the question mark as to its future still hangs over those people for whom the Minister expressed some concern here on 1 April when he talked about the rationalisation process. I am not clear as to the thinking of the Department of Finance on how they will move with ICC. The Minister clearly indicated previously that ICC was on the market for sale. He stated on 1 April that he was not interested in the fast buck. The value being put on ICC ranges from £20 million to £30 million.

In terms of the credit control mentality within the Department of Finance, that kind of capital receipt which was one of the options that Deputy Noonan on occasion has recommended for dealing with the national debt, will not do much for it. I suspect a better way of dealing with the ratio of GNP to national debt is for the economy to grow faster and to reduce our high level of unemployment. ICC could be disposed of mindlessly into the market place to whoever could reach the reserve which somebody in the Department of Finance would put on it, but as I suggested on 1 April, going into the market with a bride — rather than some-one you wanted to dispose of — and seeking a constructive and productive marriage that would address the very real problem of venture capital — among other things that have already been identified — would be a much better way of achieving an objective which I suspect all of us in this House share, that of bringing this economy into the correct position to meet the five criteria of European Monetary Union by 1997 at the latest.

The mentality of selling off assets still seems to prevail but the distastefulness of that within some elements of the Fianna Fáil Party seems to have created a sense of coyness in the Minister for Finance, unlike the robust disposal attitude displayed by a former Minister for Finance, Mr. MacSharry, when he was in that position. That coyness is caught between a recognition of the necessity to raise the extra few bucks and a reluctance to state it publicly in a manner that might attract some negative comment.

ICC will be a better financial institution and will be as formalised as a bank. Effectively it is a merchant bank — it always was — but it will now become a bank in the legal sense following the passage of this Bill, which we will not oppose. They will be legally required to do what they have been doing for some time, to submit regular reports to the Central Bank. I share Deputy Noonan's concerns in relation to its weird construction. It will be a two tiered company where £1,000 million will be State guaranteed and £300 million will be open and non-guaranteed. From a marketing point of view I am intrigued to know how it will be sold in the market place and how they will differentiate between one financial product that has a State guarantee underwriting it and other products which have not. It seems to be an Upper Merrion Street compromise where the necessity to allow the company to grow has been recognised and the necessity to maintain or curtail State guarantees has also prevailed. I am not sure whether at a time of uncertainty in the financial world that kind of compromise is the best way to move forward.

I should like to turn to an issue I raised on 1 April and to which we got no response, that was the linkages that the Irish financial institutions must begin to create in a European Monetary Union that will stretch all the way from here to Helsinki on the northern side of Europe, and as far south as Athens and Seville on the western side. Where is the strategic thinking in relation to a financial regime that will prevail in eight years from now whereby there will be a single central financial bank or monetary institution based either in Bonn or London — preferably for all of us in this part of the world it will be in London — and, in addition, a single currency that will remove much of the soft profit that the two resident dominant banks make at present from currency transactions.

All tourists have to change money when they come here — I do not know what the tourist expenditure is but between now and the response I hope the Minister will be able to get the figure. There is one and a half per cent commission on changing pesetas into Irish pounds for every Spanish student who comes into Ireland. That is one way in which profit is made effortlessly but that will disappear within two to four years if not sooner. It is now that a modern Irish financial institution, post-EMU, should be in the process of being established by the Department of Finance and the Minister.

The Minister spoke recently in glowing terms at the celebratory function for Woodchester Credit Lyonnais Bank and talked about the merits of competition and the welcome that has been extended by many people in the Irish economy to the growth of that company with a degree of efficiency and market acumen that we all admire. There is no correlation between the news expressed by the Minister on that particular evening in the company of so many people from the Irish financial community, and the lacklustre, coy presentation to this House tonight. I have no suspicion that the Minister has a secret or hidden agenda — I know the man too well for that — but what I do suspect is that there is indecision in the Department of Finance and that a treasury mentality is being attached to State assets instead of an economic development attitude to the utilisation of State assets.

I repeat that what is needed is a Green or a White Paper, a discussion document — and I invite the Minister to respond — that can be circulated to the relatively small financial and business community asking all of us what kind of banking structure we want to be in place by the year 2000, now only eight years away, what form and shape it should take, and what opportunities such a banking structure will present after the creation of a Single European currency in a market which on the first day of eligibility will have at least 250 million people. Certainly, all the member states will not be eligible on day one but the market will be of the order of 250 million people. What kind of banking system do we want to cater for a market of that scale spread over at least seven or eight countries with a European Central Bank located either in London or Bonn? What should any Irish Minister for Finance be doing now to ensure that the domestic banking system will survive as an autonomous Irish entity with loyalties to this place.

Let me give you an indication of the scale of the competition we are likely to face. Abbey National Building Society — a name with which you will be familiar from advertising — lends more by way of mortgage finance in a single month in Britain than the combined Irish mortgage industry lends in an entire year, that is coming from one country which has a similar product to ours in relation to mortgage finance. The Italian, Spanish and German financial institutions are into a scale of operation that is enormous by our standards. If we do not have some unique strategy that will enable us to harness the benefits of that scale of market and at the same time minimise the threats to domestic operation, we will lose much of what we currently have and not replace it.

We cannot allow a debate in the House on the disposal of something as essential as ICC, who have a borrowing capacity of up to £1.3 billion and a substantial deposit base, without demanding a much clearer presentation of the range of options from the Minister for Finance. I am not asking him to say what is the preferred option or what he intends to do. A serious debate on the future of Irish banking post-EMU, or within European Monetary Union, must take place. We are getting no indication whatever that there is a recognition that dangers, possibilities and threats exist or that anybody in the Department of Finance is thinking about possible alliances and allegiances after 1997.

Debate adjourned.