Vol. 428 No. 2
16 Mr. Rabbitte asked the Minister for Finance if any timetable has been set for the development of a third banking force as proposed in the Programme for a Partnership Government 1993 to 1997; the proposed link with the network of An Post; and if he will make a statement on the matter.
52 Mr. J. O'Keeffe asked the Minister for Finance the reaction, if any, of the Trustee Savings Bank to the Government proposal to seek a merger of the ICC/ACC Banks with the Trustee Savings Bank; and if he will give details of the legislative programme for the proposed merger of the ICC, ACC and Trustee Savings Bank banks.
54 Mr. Cox asked the Minister for Finance the steps, if any, which have been taken to implement the Government's proposal for a third banking force.
86 Mr. Noonan (Limerick East) asked the Minister for Finance the steps, if any, he has taken to establish a third force in banking; if he, or his officials, have had discussions with the ACC, the ICC, the Trustee Savings Bank or the Post Office in this regard; and if he will make a statement on the matter.
88 Mr. J. O'Keeffe asked the Minister for Finance the economic and fiscal benefits of State involvement in banking as proposed in the Programme for a Partnership Government 1993-1997.
89 Mr. Yates and Mr. J. Bruton asked the Minister for Finance if legislation will be required to fulfil the commitment in the Programme for a Partnership Government 1993-1997 for a third banking force; and if he will give details of the plans, if any, he has in this area.
I propose to take Questions Nos. 16, 52, 54, 86, 88 and 89 together.
The benefits of the proposals in relation to banking in the Programme for a Partnership Government 1993-1997 are set out in the programme. Work to give effect to these proposals is proceeding and there have been preliminary contacts in the matter with ACC and ICC. Appropriate contacts will be made with Trustee Savings Bank and An Post in due course. A timetable for the development of a third banking force has not been set.
It is envisaged that legislation will be required in due course to give effect to the concept.
I wish to point out to the Minister that my question related to a timetable. Has a timetable been set for the development of a third banking force or, as Deputy Dukes suggested, has the idea been dropped already?
No, I want to assure the Deputy that the idea has not been dropped.
It is just dying of natural causes.
The preliminary work did not commence until after the budget, four weeks ago. Since then we have been actively involved in talks with both the ACC and ICC.
Not the Trustee Savings Bank.
The matter has been discussed between Government Departments and within the Government and full proposals will be brought forward in due course.
Does the Minister accept that State controlled banks are common in the EC? Does he acknowledge the need for a truly development bank in the Irish economy? In the case of An Post, reference to which is specifically contained in the Programme for Government, can the Minister say whether any contact has been made with the An Post network?
State banks are very common in some EC countries while they are not in others. France, in particular, has a number of banks and insurance companies that are State-owned. We are examining all aspects of the matter. I am not sure if the relevant Minister has been involved in consultations with An Post but he has been involved in the discussions. As outlined in the Programme for Government, An Post will certainly be involved in due course.
Is the Minister aware that the only conclusion they have come to in regard to a merger between the ACC and ICC is that there will be very substantial job losses, particularly in the ACC? Is he aware that the boards and management of both banks and his Department have very serious concerns about this idea, which is unworkable?
I am sure Deputy Yates is aware that the only substantial proposals the Government has received in recent months has been from the ICC, that is, the proposals to take over ACC. Naturally these proposals will also be considered by the Government.
In regard to the consultations which the Minister proposes to have with the Trustee Savings Bank, can he assure the House that in respect of the 1989 Trustee Savings Bank legislation he will, to use Government terms, respect the will of the trustees on whatever way they choose to handle this matter?
That matter would have to be taken into account. The legislation and the arrangement for the Trustee Savings Bank are unique and that would have to be taken into account.
Will the Minister confirm that part of this fantastic deal to link the ACC and the ICC is apparently to be funded by one of those institutions borrowing and looking for a State guarantee on its borrowing? Will he indicate the logic of the State incurring a new debt in order to fund a merger between two bodies which it already owns? What is the logic of that and what possible benefit can there be in it for the taxpayer?
I am sure the Ceann Comhairle would agree that during Question Time I could not attempt to conclude the amalgamation of the various banks.
That is what the question is about.
The proposal in regard to merging the ACC and the ICC is a proposal from the board of the ICC.
They are looking for a State guarantee.
Sorry. I call Deputy Jim O'Keeffe.
Is the Minister saying that the State is going to guarantee lending by one institution in order to buy another State institution?
I have to say that I should have called Deputy O'Keeffe earlier. He has a question tabled on the subject and he is entitled to precedence.
It will be a lender of last resource.
In relation to the Trustee Savings Bank, with which I have had some discussions, can the Minister clarify that (1) the Trustee Savings Bank is opposed to the proposal, (2) there has been no discussions with it on the proposal, (3) there will be no coercion and (4) there will be no question of a merger between these banks and the Trustee Savings Bank? I ask the Minister to clarify those points because there is some concern on the part of the people who are working in the Trustee Savings Bank and clients of the Trustee Savings Bank about a proposal which apparently has been put forward without any consultation or consent on their part.
Tell us what we know already.
The proposals being examined by the Government are in the Programme for Government.
And there they will stay.
There is no confusion about this issue. Those proposals are in the programme. As I said, we are examining all aspects of the matter. Obviously, Deputy J. O'Keeffe is in a better position than I am because I have not spoken at all to the Trustee Savings Bank.
I thought it was wise to do so since it was apparently involved in this proposal.
Let us hear the Minister's reply.
When I speak to the bank I will know precisely what it wishes to do. I was involved with it in the discussions held last year in regard to both the Dublin and Cork Trustee Savings Banks. At that stage it said it needed some time to settle down and ensure that that amalgamation was a success. I am very glad that the decision I made to amalgamate them has been working out very successfully, the matter having been lying around for many years in Government Departments.
Has the Minister told the Labour Party that?
Will the Minister confirm that there will be no coercion of the Trustee Savings Bank? I understand their position is that they do not want to be involved in this third banking force or whatever codology the Minister is talking about. Will the Minister confirm that this will be respected and that they will not be forced into any arrangement?
When the Government have decided on what way to proceed, I am sure the board of the Trustee Savings Bank will not consider it any kind of codology and will be very glad to cooperate.
