Pádraic McCormack
Question:90 Mr. McCormack asked the Minister for Finance if he is satisfied with the competitiveness of Irish banking services by international standards. [9657/03]
Written Answers - Banking Sector Regulation.
The main focus of my role in the banking sector is the delivery of an appropriate legislative framework for prudential supervision. Once that statutory basis has been put in place, it is up to the Central Bank to operate the day-to-day prudential supervision of the banking sector. The quality of our system of financial supervision is widely recognised abroad. This is one of the reasons that Ireland is seen as a location to establish financial enterprises.
As regards the core of the Deputy's question, it is not clear whether he has in mind the banks' competitiveness from the perspective of the provision of services to consumers or in terms of their ability to compete against other financial institutions internationally.
The Deputy will be aware that the Competition Authority is currently carrying out a study of competition in the provision of banking services in the State. I understand that the study covers the markets in which the clearing banks operate, including other participants in those markets such as the credit unions and An Post, but does not include investment banking. The study will seek to identify both the degree of rivalry between participants and any barriers to the entry of new participants. In the final analysis, it is the efficient operation of market forces that will ensure that there is effective competition between the banks in the services they supply to their customers.
I would also refer the Deputy to the strategic review of banking undertaken by officials of my Department and of the Central Bank, and which was published in August 2000. It recommended that the regulatory authority for financial services should be mandated to monitor and report on competitiveness in the financial sector as it affects bank customers. I have accepted this proposal, and a provision to this effect is contained in the Central Bank and Financial Services Authority Bill 2002, which is currently before the Seanad.
On the wider question of the ability of the banks to compete against their industry peers both domestically and internationally, this is primarily a matter for the banks themselves. However, the Deputy will be aware that I regularly make appropriate legislative changes to support the position of Ireland as a centre of excellence in financial services.