Future of Banking in Ireland: Statements

I wish to share time with the Minister of State, Deputy Fleming, in order that we may cover off the different issues for which we are responsible.

Is that agreed? Agreed.

We are all deeply aware of the uncertainty we face across many parts of our society and economy. That assessment is particularly applicable to where we stand with the future of banking here in Ireland. It has been a difficult year. I want to open by asserting my fundamental view on the future of banking, which is that, ultimately, the banking system should serve as the means to help households and firms achieve their financial, economic and social needs. I want to update Deputies on some forthcoming legislative and regulatory changes before turning to the latest developments in the banking sector.

I will begin with what is under way at EU level. As Ireland is part of the EU's Single Supervisory Mechanism, SSM, supervision of the Irish banking sector is informed by the EU framework and our main banks are jointly supervised by the Central Bank of Ireland and the European Central Bank. The risk reduction measures, RRMs, which are a package of prudential banking reforms agreed by the European Parliament and Commission, which amended the capital requirements regulations, capital requirements directives and the bank recovery and resolution directive, were transposed into Irish law in December. The Commission is expected to bring forward additional legislative proposals in September to bring the European banking regulatory framework further in line with internationally agreed standards set by the Basel Committee.

On the domestic front, it is important that problems in the banking sector are anticipated and prevented before they impact on the wider public. This is why we will bring forward a Central Bank (amendment) Bill to make a significant contribution in this regard. The Bill will introduce a senior executive accountability regime, SEAR, which will place obligations on firms and the senior individuals within them to set out clearly where responsibility and decision-making lies. Among other provisions, the Bill will also introduce conduct standards for individuals and firms, imposing binding and enforceable obligations on all regulated financial service providers, RFSPs, and relevant individuals working within them with respect to expected standards of conduct. Subject to the advice of the Attorney General, I intend to publish the heads of this Bill before the summer recess.

To keep up with the new ways in which people borrow money, my officials have also been working on a Bill to bring the providers of personal contract plans, PCPs, hire purchase, consumer hire agreements and indirect credit within the regulatory remit of the Central Bank. This will provide consumers with the protection of the Central Bank's consumer protection code. A review of the code is under way and a public consultation on the Central Bank's proposals for amendments will take place in 2021.

With regard to the activity of banks, Banking and Payments Federation Ireland, BPFI, data suggest that the market for new mortgage lending has rebounded quickly from the immediate impact of the pandemic. Of course, it is important that the necessary prudential and consumer protection measures continue to be applied by lenders as they serve the best long-term interests of everyone in the mortgage market.

I announced last week my intention to sell part of the State's 13.9% direct shareholding in Bank of Ireland. To date, €19.2 billion of the €29.4 billion invested in AIB, Bank of Ireland and Permanent TSB over the period 2009 to 2011 has been recovered by way of disposals, investment income and liability guarantee fees. The remaining investments in these three banks are currently valued at €5.3 billion, leaving a gap of just under €5 billion. In the case of Bank of Ireland, the State has already recorded a cash surplus to date, with €5.9 billion having been generated as against the €4.7 billion originally invested in the bank. The State's remaining equity stake in the bank is valued at close to €700 million. I cannot disclose any further details in regard to the plan at this point as it would be detrimental to maximising value for the taxpayer. At the end of the period, the trading plan can be renewed at my discretion following consultation with officials and our advisers.

In April, KBC announced that it had entered a memorandum of understanding with Bank of Ireland which could lead to a transfer of its performing loan book. This announcement came quickly after NatWest's decision to withdraw Ulster Bank from the Irish market. I welcome the announcement by Ulster Bank on Monday that it has reached a binding agreement with AIB to sell approximately €4.2 billion of its performing loan book and transfer approximately 280 of the staff who work primarily on that loan book. It is also welcome that Ulster Bank's negotiations with Permanent TSB and other parties are continuing.

Ulster Bank also recently announced that it has reached an agreement with the Financial Services Union, FSU, in regard to a severance package for staff. While this is subject to a ballot of the FSU's membership, it represents constructive progress in regard to Ulster Bank's withdrawal.

This overview makes clear that our banking sector is currently in a state of flux. The recent announcements, including those relating to the closure of bank branches, give us cause to reflect on the sector's structure and consider its future. Advances in technology, the proliferation of innovative fintech players and the expansion of non-bank lending mean we are moving to a more diverse banking sector. The increasing role of credit unions and An Post in the provision of banking services in the community must also be part of the conversation. In this context, it is absolutely necessary that we examine the banking sector, review the current landscape, consider how this has evolved over the last two decades and assess how the system can best support social and economic activity. My Department, the Minister of State, Deputy Fleming, and I will undertake a broad-ranging review to look in detail at the many relevant issues, including the expectations of the sector, possible gaps in competition and consumer choice and the key role of the banking sector in the provision of sustainable credit to the economy. The review will need to assess the availability of credit to SMEs from both banks and non-banks, consider whether there are market gaps or failures and consider options to further develop the mortgage market. It will be necessary to look at the cost of doing business for the sector, including impacts on its sustainability and the forces for change at play or foreseen, be they related, for example, to Covid, Brexit, climate change, housing, regulation or technology. Many suggestions have already been put forward and I will take them into account in developing the terms of reference. I assure Deputies that the review will consider various issues raised for this critical sector in our economy and society in recent months.

I look forward to hearing the views of Deputies. The Minister of State and I are well aware of the needs, challenges and expectations of the banking sector in our economy at the moment. We have had many debates on the sector in the House in recent months. It continues to be the case that much change is under way. As I said, I am clear in my expectations and ambitions for what that sector can do within our economy and how it can maintain and grow the employment that it provides, notwithstanding the changes that are under way and the many challenges that, for example, the branch network is facing at the moment, which led to the announcements earlier in the year. I look forward to hearing the views of Deputies. The Minister of State will take the House through other areas in the banking sector.

I thank the Leas-Cheann Comhairle for the opportunity to discuss the future of banking services for the public. I thank the Minister, Deputy Donohoe, for sharing time with me for this important debate. The Minister has set the scene for current developments in the banking sector, whether legislative, EU-driven or resulting from market announcements. All of these matters frame the discussion on the future of banking. I will follow the Minister's comments by updating Members on some key issues which cut across my areas of responsibility in the Department. These include the impact of technology on local services, supporting the economy, digitisation and the role of credit unions.

The banking landscape is changing. The recent announcements of branch closures are disappointing and regrettable. The announcement to close branches is clear evidence of the impact technology is having on banking services and the way the public interacts with banks, credit unions and other financial service providers. There has been a significant change in consumer behaviour recently. Young people have adapted to change in the use of technology as have many older people. This is reflected in increased online shopping and purchases from home and online.

The banking sector is among many businesses that are conducting a greater proportion of their business online. Contactless payments of up to €50 have resulted in many people using cash less, which is evidenced by the reduction in withdrawals from ATMs recently. It is important that those who are not familiar with technology are fully provided for and are not excluded. I am not just talking about elderly people who may not be familiar with modern technology but also about people who may not have access to broadband in their homes or to Internet facilities. Many people still do not have an adequate mobile phone signal in their homes. Without these two options, there is a possibility that some people may be excluded. We have to take that into account. That is why even though it seems a strange debate in which to make this point, the extension of the national broadband plan throughout rural Ireland will help people to ensure that they are not excluded from banking and other services in future.

Many people will still want to carry cash and to do their banking in person. That is many people's choice. It is worth reflecting that the credit union network, which has over 400 branches, is collectively larger than any of our retail banks at present. It has a big footprint in our cities, towns and throughout the country. It is welcome that Bank of Ireland is now entering into a new partnership with An Post. An Post's network across the country combined with the credit union branch network provides a large number of locations where people can conduct their banking in person on a daily basis. This will allow personal and business customers to use their local post office for a range of banking services and not just for depositing cash.

Technology is driven by new services, new ways of banking and greater mobility between service providers. Increasingly, banks and credit unions are competing with technology-driven firms. This impacts not just customers but also staff. Staff must not be left behind in this process. They must be supported and retrained as banks and credit unions increasingly use new digital skills. I stress the importance of that. Many banks and financial companies are technology-driven companies. One major bank in the financial services sector stated that it has more staff working on technology for the bank than Google has working on technology in Ireland. People know that you cannot have a debit or credit card without sound technological support to make it all happen.

When we look to improve the retail financial sector, it is important that we view banks and credit unions as a means to help households and firms to achieve their financial, economic and social needs. Sustainable and responsible competition in the retail financial sector is vital to ensuring that businesses and consumers have a range of banking options and services available when using financial services and accessing credit.

Following the recent announcements, we know that many small and medium enterprises, SMEs, including agri-SMEs, will be looking to refinance away from Ulster Bank. It will also be essential that sustainable businesses and firms will be in place to meet the needs of consumers and the economy when the pandemic has passed and that these firms have access to appropriate credit facilities. To that end, the Strategic Banking Corporation of Ireland has worked closely with the Department of Enterprise, Trade and Employment, the Department of Agriculture, Food and the Marine and the Department of Finance on the design of a number of credit-related support schemes including the Covid-19 credit guarantee scheme.

I believe that credit unions have an opportunity to play a bigger role in providing greater competition in SME and microbusiness lending to many small retailers and sole operators across the country. Many community credit unions already provide such lending. Approximately 19 credit unions are involved in the Covid-19 credit guarantee scheme, which will hopefully be a precursor to credit unions taking a larger role in State-supported lending in the future. I remind people that it is a State-guaranteed loan scheme. Some 80% of the loan is guaranteed by the State so the risk to the financial institution is significantly diminished. That is why I welcome credit unions moving into this area. Since the risk to the financial institution providing the loan is reduced, it can offer competitive rates. I encourage people to follow up on that scheme. They can obtain a loan of up to €200,000 without having to give a personal guarantee because of the State's support of this scheme.

Retail banks and credit unions have had to transform their digital offerings due to customer preference and for cost reasons. This has led to large, increasing numbers of customers transacting digitally rather than in person. This shift to digital has been accelerated by the pandemic but was already under way long before the pandemic began. Banks and credit unions have also had to adapt to new competition from entities which are often digital only. Our policy framework will need to adapt for these emerging digital finance firms. Many people like to get old-fashioned bank statements in the post but many others are quite happy to be able to access it on the Internet or their mobile phone.

Officials in the Department of Finance have been actively engaged in the negotiation of the digital finance package proposals published by the European Commission. The aim of the digital finance strategy is to ensure that financial services rules are fit for the digital age and to stimulate responsible innovation and competition among financial service providers in the EU, while ensuring a level playing field for all. The main components of the package are the Commission's communications on retail payments strategy for the EU and a proposal for the regulation of markets in crypto-assets, MICA. People hear about crypto-assets and cryptocurrencies and any reform or examination of banking in the future will have to be aware of these issues. There is also a proposal at EU level for the regulation of digital operational resilience, DORA.

As we move towards a more digitalised system, it is important that legislation ensures that we protect consumers, put in place a more resilient framework and encourage even greater innovation. Officials are involved in promoting Ireland as a location of choice for financial technology, fintech, development under the Ireland for Finance strategy. While many of these firms could, and do, compete with banks and credit unions, many are also crucial service providers, assisting the financial system in adapting to the needs of customers.

The programme for Government includes a review of the policy framework for credit unions, a review that I am currently progressing. While there are challenges facing the credit union sector, the strengths of the movement cannot be underestimated. Credit unions have the capacity to help communities all over the country to confront the challenges that they face. While the movement is undoubtedly a success, I believe that it has the potential to do much more, particularly in developing the structures and expertise to grow SME, micro lending and mortgage lending.

The Government wants to ensure that banks, credit unions and the wider financial system will effectively contribute to and support economic growth and employment. The acknowledgment of the positive role of the sector is central to any discussion on the future of banking.

Any review must also be forward thinking and forward looking to take account of changing consumer behaviours in the future. I look forward to hearing the views of Deputies on this important topic and the proposals they have to improve and expand the services provided by banks and credit unions in the overall interests of the economy and our people, especially their staff and customers.

Cuirim fáilte roimh an díospóireacht seo agus roimh an deis labhairt ar thodhchaí na mbanc, earnáil atá ag éirí amach as an ngéarchéim agus atá ag dul trí athruithe móra. Sa bhealach agus go bhfuilimid ábalta dul i ngleic leis seo, tá páirtithe leasmhara ar nós the Financial Services Union agus mo pháirtí féin, Sinn Féin, ag iarraidh go mbeidh fóram ann ar thodhchaí na baincéireachta. Thabharfadh sé seo na páirtithe leasmhara le chéile le plé a dhéanamh ar an earnáil, na dúshláin atá roimpi agus an bealach chun tosaigh le tús áite a thabhairt do chustaiméirí, oibrithe agus seasmhacht an gheilleagair. Ba chóir go mbeadh téarmaí tagartha leathana ag an bhfóram, agus scóip atá soiléir. Cé go mbeadh an fóram ag déileáil le ceisteanna ar nós cúrsaí digiteacha agus iasachtaí do ghnóthaí beaga agus measartha, ba chóir freisin aird a thabhairt ar an easpa muiníne atá ag an gnáthphobal san earnáil cultúr na mbanc agus cosaint do thomhalltóirí.

I welcome the debate and the opportunity to speak on the future of banking, a sector that has come out of a crisis and is undergoing profound changes. In response to these developments, many, including the Financial Services Union and Sinn Féin, have called for the establishment of a forum on the future of banking, bringing in all stakeholders to discuss the current state of the sector, the challenges it faces and to chart a path forward that best serves the interests of customers, staff and financial stability. While the terms of reference of such a forum should be wide-reaching, its scope should be clear and well defined. While such a forum will focus on issues such as the digitalisation of financial services and small and medium enterprise, SME, lending, it must also pay attention to the lack of public trust in banks, banking culture and consumer protection.

On 17 May, the Irish Banking Culture Board published the findings of its public trust in banking survey. It found that 43% of respondents said that their perception of banks had worsened since the 2008 financial crisis, with only 23% saying their perception had improved. Overall, 46% recorded a low level of trust in the industry with only 19% recording a high level of trust. In short, the public are not convinced that sufficient change has taken place to improve its perception of the industry. This mistrust finds its origin in the financial crisis of 2008 caused by a combination of Government failure and corporate greed.

However, the financial crash and its consequences are by no means the only explanation for public mistrust of the sector. In its final report on the tracker mortgage examination, the Central Bank reported that more than 33,000 borrowers had been identified as having been affected by the scandal with €683 million paid in redress and compensation by the end of May 2019. As the Central Bank noted, since the examination began in 2015, some lenders initially attempted to minimise the number of affected customers to whom they would have to pay redress and compensation. As a result of the banks' actions, 99 family homes were lost by the end of May 2019.

This scandal left a deep and lasting impression in the eyes and minds of the Irish public, an impression that was periodically repeated as banks continued to mistreat their customers even as the examination was under way. Since 2019, three of the five retail banks have been reprimanded and fined a combined €77.1 million by the Central Bank. Disturbingly, even during the examination harm was meted out by both KBC and Ulster Bank with their failure to comply with the Central Bank's "stop the harm" principles.

Public mistrust in the banking sector is, therefore, a consequence of the actions of banks and nothing else, but responsibility also lies with the regulator and the Government. The most effective way to manage bad behaviour and reduce bad outcomes is to ensure that individuals are aware of the responsibilities and are held accountable for their actions. A lack of individual accountability paves the way for misconduct and the mistreatment of customers. In July 2018, the Central Bank called for a range of reforms that would enhance its toolkit to promote what it describes as "a culture of ethical compliance by firms and individuals". Among the reforms sought was the introduction of a senior executive accountability regime, which would place obligations on firms and senior individuals to set out clearly where responsibility and decision-making rests, thereby ensuring clear responsibility and accountability.

More than three years since these reforms were first requested, the Government has yet to publish the heads of Bill of the legislation that would provide for them. This is simply unacceptable and reveals a Government that does not take accountability in the banking sector seriously. The legislation that provides for its introduction must be published by the Government without delay. Trust can only be earned by improvements in standards and the service provided to customers. As the public trust in banking survey recorded, only 38% of respondents agreed that the banking sector responded well in helping society during the coronavirus pandemic. As we emerge from the pandemic, the sector has an opportunity to rebuild trust and demonstrate change by the way it treats its customers. With unemployment unlikely to recover to pre-pandemic levels until after 2022, a cohort of borrowers will find themselves in some form of mortgage arrears and they must be supported.

The code of conduct on mortgage arrears and the mortgage arrears resolution process should have full legal effect with lenders working through the full suite of alternative repayment arrangements with affected borrowers. This code should be a statutory requirement, not an option. This must be coupled with an end to the selling of mortgage loans to non-bank entities and vulture funds as the option of first resort. As the deputy governor of the Central Bank noted in November 2019, "the Central Bank is still having to push banks and non-banks too hard to take a customer centric approach to resolving arrears". These issues must be included in the terms of reference of any forum on the future of banking.

The withdrawal of Ulster Bank and KBC from the market raises other profound questions about our banking sector. In a response to a letter my colleague, Deputy Doherty, wrote to the Central Bank, the deputy governor warned in December last year that the exit of a retail bank from the market "could contribute to upward pressure to lending interest rates and potentially lead to weaker credit availability". We now face the exit of two retail banks. Such change, and the risks it poses, calls for a new strategy towards the sector. I welcome the willingness of the Central Bank to participate in such a forum and regret the position of the Department of Finance in this regard. Just as it was appropriate for Departments to engage with stakeholders in the national economic dialogue, so it is appropriate for the Department of Finance and the regulator to engage with stakeholders on the future of the banking sector. I ask the Minister to now set about establishing the terms of reference for such a forum without delay.

Today's debate also comes after the announcement by the Minister for Finance last week that he intends to sell the State's shares in Bank of Ireland in the coming months. More broadly, Sinn Féin believes it is in the interests of the State, consumer and taxpayer to maintain a shareholding presence in the banking sector. This includes maintaining a majority shareholding in AIB, especially as the market approaches a state of duopoly with the exit of Ulster Bank and KBC. This allows the State to pursue its strategic interests when key decisions and transactions take place. That position should be maintained. Furthermore, disposing of the State's shareholding in AIB at this time, or in the near future, would fail by some margin to recover the €20.8 billion pumped into the bank by the taxpayer.

Sinn Féin has concerns about the timing of this announcement as regards Bank of Ireland, given that its share price has fallen significantly in recent years and its shares are considered to be undervalued presently. It is essential that any sale achieves value for money for the taxpayer and the Minister must explain why now is the appropriate time to sell.

At a meeting yesterday of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach to discuss banking, it came as a bit of a surprise to hear senior officials from Allied Irish Banks say the banking sector here is very competitive. I am sure that also came as a surprise to the many informed observers who may have been listening in. After all, the former President of the ECB, Mario Draghi, told the same committee that when it came to banking we had a quasi-monopoly in this State and that this was a contributory factor in driving up the cost of credit for homes and business borrowers. If a quasi-monopoly was an accurate an description in 2018 when Mario Draghi made those remarks, with the announcement from KBC Ireland that it is pulling out of the Irish market, it is really accurate today.

I listened with interest to the comments of the Minister, Deputy Donohoe, and the Minister of State, Deputy Fleming, on the role credit unions could and should play. I have previously raised with them my view that credit unions have a significant role to play. They are trusted institutions in this State. They are not profit-driven institutions, they are run for the benefit of members and any surplus they generate is returned to members in low interest rates on loans and high interest rates on savings. The credit union movement has within it the seeds of a not-for-profit banking system. If credit unions were allowed to compete, they could become real competitors to the banks. The sector has been saying very clearly that it is being starved out of existence because it can barely get involved in the largest consumer credit market in this State. I have raised this previously with the Minister and Minister of State when I outlined in detail the regulations the credit unions set out to us, as I am sure they have done to the Minister and Minister of State, that place them at a competitive disadvantage. I note that today the Minister and Minister of State have said they believe in the credit unions.

I recall that when the credit unions were before the finance committee they set out what they need. As the Chairman of the committee pointed out, we hear often that people are in favour of the credit unions but we are not seeing action in that regard. Credit unions would be able to compete and would bring a level of fairness and allow the cost of credit to come down if they were allowed to do so. That is important going forward.

I welcome the opportunity to speak this evening on the future of the Irish banking sector. I ask the Minister to respond to three points in his closing remarks, namely, the publication of legislation for the senior executive accountability regime, the establishment of the forum and the reason for the disposal of the State's shareholding in Bank of Ireland at this time and if it will provide best value for the taxpayer now and in the next six months. I am sure the Leas-Cheann Comhairle will be delighted that I finished my contribution early.

I welcome the opportunity to participate in the debate on this pivotal issue for Irish society and the economy at this particular moment in time. The level of public interest in this issue is growing. This is evidenced by the fact that we are having a significant debate on this significant issue so soon after we had a similar debate a few short months ago. The type of changes we have seen in the banking landscape over the past few weeks are of the type one would usually see take place in the banking market or in any given economy over a period of years. Ulster Bank is to exit Ireland. KBC Ireland also plans to exit. Bank of Ireland is closing 88 branches and, over a period of time, the Government will sell its stake in Bank of Ireland. I, too, question the timing of that particular decision. Notwithstanding some sensitivities around the sale of bank shares, I ask that the Minister or Minister of State elaborate on that in their closing remarks.

There will be huge change in the way we do banking. We have seen change over the past couple of years and it will escalate. It will impact on thousands of good and highly skilled jobs. I regret that in recent times those working in the banking industry have been treated like pawns in a game by senior bankers. Little regard has been shown to them in the decisions that have been taken on bank branch closures and banking competition and consolidation. All of these dramatic changes will fundamentally alter the banking and business landscape over the next few years. While all of this very radical change is happening on a piecemeal basis, it is taking place in the absence, until now, of any real sense of strategic of direction for the Irish banking and finance sector from the Department of Finance, Government and the Central Bank. Nobody expects the Government to involve itself in the day-to-day decision-making and operation of banks, including in the banks in which we have significant shareholdings. However, given the scale of the State's investment and shareholding, we are entitled to expect that the State's interest in the direction of banking would extend beyond divesting itself of bank shares.

I am pleased the Minister confirmed today that a review of banking will take place under the aegis of his Department. I have said previously in this House and elsewhere that the future of banking should not be left to bankers alone. It is a matter for government, for all of us as policymakers and for all stakeholders. For some time now, I have been taken with the detailed proposition set out by the Financial Services Union in regard to a forum on banking that would be led and facilitated by the Department of Finance, but would not necessarily be owned by the Department of Finance. We need such a national conversation about the future direction of banking. I am pleased to note that the Minister referenced that today. I am interested in hearing the nuts and bolts around how that will proceed, particularly the timeline, how it will be scoped out, what the terms of reference might look like and how we, as Opposition spokespersons and Members of this House, can contribute to that process.

This will be a very important process. We know we are careering down the path of an effective quasi-monopoly in the context of Irish banking. The review must look at the potential of, for example, a third banking force, something we have spoken about very earnestly in this Chamber for many years now. That will be important as we try to build up the Irish banking sector and create a form of competition that we do not have at this point in time, which is impacting on businesses, job creation and the high level of mortgage interest rates that Irish consumers have to pay for a host of different reasons.

The review should also look at the prospect of introducing a real and sustainable public banking model in this country, which is an issue we have shied away from. Over the last few years, many reports have been generated about the prospect of establishing a public banking model based on the German Sparkasse model. Dare I say it, only lip service has been paid to it. I was disappointed that during the term of the Labour Party in government from 2011 to 2016 that particular proposition did not evolve to any great degree. A report was done and sent to Ministers and it was essentially dismissed. I believe that model has some potential. It works elsewhere.

I am pleased the Minister of State, Deputy Fleming, referenced the credit union sector and the potential for it to grow, evolve and play a much more fundamental role in banking as we know it in this country. Banking will change. There are huge opportunities for innovation in this space as well, the kind of innovation that people have already adapted to and are demanding more of. There are some really exciting developments in Irish fintech as well. Irish start-ups and SMEs are very active in that area.

I am pleased the Minister has reported to the House that he will shortly publish the heads of the Bill to give effect to his commitment on the senior executive accountability regime.

I look forward to engaging with the Minister and his colleagues on that.

Problems with regard to trust in the Irish banking system were mentioned earlier on. I have had very positive engagement with the Irish Banking Culture Board on that particular issue. Accountability is important. It is not just corporations that make decisions that impact on our lives, but individuals. There needs to be a proportionate regime to make individuals in senior positions accountable for the decisions they take in our banking and finance sector.

I thank the Ministers for this useful debate. Deputy McGuinness is in the Chamber. He has campaigned for this for a long time, which should be acknowledged. We need to see firm actions arising from this. It cannot just be a talking shop of a Thursday to fill out the Dáil schedule. The banking sector has seen enormous changes in the last ten years, and in the last five in particular. All of us in this Chamber will have seen these great changes, for example, the move towards online banking and away from traditional branch banking with its traditional human relationships. We are also still seeing the aftermath of the financial crash of 2008, 2009 and 2010. Banking played a role in that crash, which had consequences for the country and for people's lives. There was also the tracker controversy, which eroded further the trust and confidence that had already been eroded by the previous crash. It was extraordinary how long it took to resolve that and for the banks to fess up to it, as was what they put families and people through and what they were willing to do to customers, citizens of this State, to avoid responsibility. It eroded trust in a way which perhaps even the events of the period from 2008 to 2010 did not because we saw the way in which the banks were going to treat people individually.

When all of this is put together, one can see that this is a tumultuous time for banking. I want to pick up on a point Deputy Nash raised, which is that this tumult seems to be coming down on the shoulders of bank staff. That is completely out of order. In the case of Ulster Bank, when it made the announcement that it was pulling out, its staff, which had been loyal, excellent and the front face of an organisation in respect of which there had been a lot of controversy over the years, heard about the decision on national media. In a similar way, where there have been cutbacks in other banks, staff seem to be the last to hear rather than being consulted about their own lives and futures. A very firm message needs to be sent to the banks to the effect that, in this time of transformation and tumult, they must recognise their staff as partners in any decisions taken rather than as passengers. They must be central to the making of decisions rather than being considered an item under any other business. From our engagement with the Financial Services Union, it is very clear that bank staff around this country feel like passengers. They do not feel central. The Government needs to send a very clear message that this is not acceptable.

As I have said, the tracker controversy and the willingness of the banks to treat customers and families in the way they did were absolutely appalling but we are still seeing this in many instances around the country. They were proactive at the beginning of the Covid pandemic in offering payment breaks but the mantra is now "come and talk to us". That makes sense when one says it but we all know that many personal customers and business customers will stick their heads in the sand and not engage because the banks do not make it easy to engage. There is a fear of engaging with banks. There needs to be much more proactivity in that regard.

I will cite the pyrite and mica situation we are facing in Mayo, Donegal and Sligo at the moment. Mortgages held and owned by banks and which form part of their capital base are directly affected by houses crumbling. The asset on which the mortgage is held is devalued by pyrite and mica. Despite this, we have found a reluctance on the part of banks to proactively reach out to families and affected homeowners and to ask them to come and speak to them. It took some engagement with the banks for them to realise what was happening. This has a number of different effects. The asset base of the banks is affected and devalued. The daily lives of customers going through this are absolutely horrific and dealing with the banks is another pressure. There is an unwillingness to deal with the banks and a fear of doing so. Proactivity at the outset would have resolved that fear and would have been a much fairer way of dealing with the issue. That proactivity is beginning to be seen now, but only in some cases. It needs to be far greater and far more energetic.

Recent years have been marked by a number of international pull-outs. The review will be worthwhile to see. Banks in this country are accused of making massive profits and running away with them and yet we are not seen as a viable location for retail or business banking. When one sees NatWest pulling out after more than 100 years of service and when one sees KBC pulling out, leaving us with a model based on AIB and Bank of Ireland, one has to ask oneself questions. We all have to ask ourselves questions. Online banks such as Revolut and N26 are slowly coming in but many people are reluctant to go to them for full banking services. While that reluctance is there, the existing two banks, which will be the only ones left in the market, will play to it. They will continue to give us this system in which we have the most expensive mortgage rates in Europe, in which business loans are much more expensive than is justified by the cost of lending and in which the level of service and product we, as consumers, get is not what it should be in this kind of country. Until that changes and until we understand the reasons banks are not entering the Irish market and make the necessary changes, our consumers, businesses and communities will suffer.

When banks decide to pull out, they turn their backs on communities. It is very easy to say that people will go online or go the post office to do their banking but in many communities in which Bank of Ireland, for example, is closing branches, these are the last retail branches not only in the town, but in the region. Bank of Ireland tells them to do their business in their local post offices but in places such as Ballyhaunis, Charlestown, Kiltimagh and Tubbercurry, which is in Sligo but in the same area of Mayo and Sligo, the post office is in a local supermarket. It is not an appropriate place to do face-to-face banking, particularly where banking of a confidential nature is involved. Post office staff and managers were not even informed that this was coming at them before the announcement was made and so were not in a position to deal with the initial queries that came in. This again is an example of how customers and consumers are not on the banks' agenda, much as staff are not. Customers and consumers of banking services should also be partners as opposed to passengers but are instead lumped in with staff and are the last to know as decisions are taken far away.

Given that the State is a main shareholder in Bank of Ireland, when a bank is leaving a community, the building it is leaving should be offered to the community either through a community trust or the local authority, especially given what the taxpayer has contributed to keep the banks afloat. The same approach should be taken to Ulster Bank and NatWest. These buildings might be developed as ehubs, community hubs or broadband connection points where, with a little bit of imagination and thinking outside of the box, banking services could be delivered. Rather than delivering these services in a supermarket through a hatch beside the fruit and vegetables, the existing building, which has the equipment and IT infrastructure, could become a community hub where many IT facilities, including banking, would be offered. We could do this rather than the building being sold, adding value for the shareholders in the bank that is departing the community. That is something I would like to see pursued.

I welcome the Minister of State's personal commitment to the credit union movement, which is well known. I know he is pursuing that and that he sees the value of the credit union movement. Credit unions right across the country are absolutely mad to go lending at the moment. They want to do proper, responsible lending but are finding that they cannot do so. Many communities, customers and businesses want to avail of these services but cannot do so.

We speak of community-based banking. We have a model in the context of our credit unions but we do not give them the powers, energy or ability to be that community banking force to provide proper competition for what are, effectively, the two remaining main banks. We need a complete change of view of our credit unions. The credit union movement needs to be seen once again as a partner in banking, in our economy and in community and community regeneration, not as a passenger.

Business banking continues to be enormously challenging. The cost of products is much more than in many other markets. I am sceptical about the way the credit guarantee scheme is being rolled out. I do not think it is having the impact it should be having in the context of Covid and lending. I ask for more engagement from Government about that product to see how it is rolling out. We have franchised out State-backed lending to the banks. Is it doing what we want it to do and giving the kind of support to businesses that we need it to give? A hard, honest look needs to be taken at that in the coming weeks, not the coming months.

On green products, if we move people into major investments to decarbonise their homes and businesses, our bankings system needs to move with them. It needs to expand considerably its product range, not just greenwash existing products but make them accessible, encourage people to take them up, make them competitive in price and reflect where people are at in their family experiences.

There is a lot to consider. Tonight's debate should only be a start, not a full stop or a box ticked to keep Deputy McGuinness and the rest of us who looked for it happy for a few weeks. It needs to be something meaningful and a signal that this Dáil takes banking reform seriously.

This has been a bad year for Irish banking. When we speak of a bad time for banking, we are speaking about a bad time for our citizens. Banks have been allowed to continue with the tradition of making their customers pick up the bill for whatever impacts the institutions cause. We saw this on a grand scale during the financial crisis, when the Government of the day stood with the banking sector and ensured that each man, woman and child would have to foot the bill for its failings and bad practices and the fallout therefrom. This will continue for the foreseeable future. When I speak of bad times for the banking sector, those who suffer are predominantly the citizens of this country.

In recent years, there has been an effort to whitewash this grim time and to reimagine what happened. The most recent example of this was when the Taoiseach was rattled by a question from a Deputy who highlighted his unwillingness to support the Debenhams workers, despite the prior willingness to bail out the banks. In response, the Taoiseach said that the banks were not bailed out. He may wish for this not to have been the case and that his party, with the input of others, was not responsible for putting us in that situation. Unfortunately, however, An Taoiseach can no more change the past than he can do right by the sectors he threw under the bus this week.

When the banks suffer, there is a warped tradition that calls for the public to take the pain. The banking system in its current form can fail communities on a localised level as well. We have seen a number of examples of this so far this year. In February, we were informed that Ulster Bank was withdrawing from the market here. That was a major blow for customers, staff and communities and it was compounded when, in March, Bank of Ireland announced its intention to close more than one third of its branches in the South and more than half of its branches in the North from September.

In my constituency, branches in Cashel, Cahir and Templemore will close in September. This will leave Templemore with no bank branch whatsoever. Deputies can imagine how this will affect customers, who will have to travel to avail of in-branch services. This is where the post office network comes into it. Shortly after Bank of Ireland announced its intended branch closures, we were told certain services would be available from post office branches. In March, the Irish Postmasters Union warned that if the Government continues to fail to act quickly and decisively to keep post offices open, local banking services would be put at further risk. At the end of May, the same organisation warned of unrestrained closures from July if Government financial intervention is not forthcoming. The Kerr report and the Grant Thornton report both contained recommendations which the Government, for whatever reason, has chosen in large part to ignore. Who will bear the brunt of this if the Government continues to ignore the plight of the post office network? It will be our postmasters, their employees and the local communities that they serve.

In discussing the future of banking in Ireland, we cannot divorce it from the responsibilities that the Government has to ensure that banking services, the ability to transact locally and ease of access to banking consultation are available to all of our citizens, whether they live in urban or rural Ireland. The future of banking in Ireland is, therefore, dependent upon the Government that is there to lead it. The traditional parties of government are not the ones to do this. If they were, we would not have such a series of crises on our hands. We would not see instances where vulture funds were given the ability to lock young families out of homeownership. In my constituency, there is great faith in our credit union system. There is great reliance on our post office network on a number of levels as well. Their potential should be realised and extended.

In the past, Sinn Féin published a document looking at how public banking could work in Ireland. The decisions of the aforementioned banks in recent times have highlighted the urgency of examining the possibility of a new public banking model. Such a model is in place in 21 European countries and many more across the world. Germany's Sparkasse and New Zealand's Kiwibank are two examples which have proven to be hugely successful and popular. The Government has previously used an Indecon report from 2019 to say that the commercial banks were fulfilling this role. They are not doing so anymore or will not be very soon. The Government must engage with credit unions and post offices to explore the possibility of using the existing infrastructures for a public banking system.

Sinn Féin has also published a community wealth-building document. This model is in operation in parts of the UK and the US. Our proposal is about developing indigenous assets in such a way that wealth is added to our communities, not extracted from them. It makes financial power work for people and local towns by retaining as much of that wealth as we can through local supply chains and targeted procurement contracts.

When we talk about the future of banking in Ireland, we must remember that we are talking about the future with our communities front and centre. We must shake off the tired ways of the past that have brought this country to its knees. Those banking models have no commitment to the people of this country, only to shareholders who could not care less about Irish communities.

Provision of banking and access to banking and financial services generally is core to the future prosperity and well-being of people across this island. Providing these services well is crucial. Getting them wrong, as we know from experience, can be disastrous.

The approach to banking of successive Ministers of Finance and the Department leaves Ireland hostage to the big banks. Since the beginning of 2015, about 340 bank branches around Ireland have closed or their impending closure has been announced. That is one third of all bank branches in Ireland at the beginning of that period. That is worth saying again: a third of bank branches in Ireland have closed or will close over a seven-year period.

The Central Statistics Office, CSO, has found the average distance to a bank - and this is prior to the departure of Ulster Bank - is 11 km in rural areas and 2 km in urban areas. In excess of 900,000 people live more than 10 km from a bank branch. Even where branches remain open, the range of services they provide is diminishing. Many branches are now cashless and do not provide over-the-counter services. Instead, they provide advice and self-service through ATMs.

The needs of small businesses are likely going unmet. Findings from the CSO indicate that 31% of enterprises valued the local connection when choosing where to bank. Some 22% of enterprises choose a particular bank because it has a local branch. An additional 10% choose a bank because the branch was known for good client relationships. When refused a loan, 42% of SMEs will forgo the funds rather than apply to another bank.

The consolidation of the market around pillar banks has many negatives for the economy, businesses and borrowers, yet every attempt in the past ten years to break the stranglehold of the shareholder banks has been frustrated by the Department of Finance.

A proposal for a strategic investment bank was throttled and instead we got the Strategic Banking Corporation of Ireland, SBCI, lending through the pillar banks. Proposals for regionally based public banks were thwarted during the most recent programme for Government negotiations. Proposals for an examination of public banking were blocked by the Department, with a whitewash report in 2019 saying there was no case for it. That report, in effect, closed down real and open debate on solutions to the crisis confronting Irish banking. The repercussions of that, as the sector continues to consolidate around two pillar institutions that are shrinking their presence in the community, are now becoming even clearer.

The Department of Finance and the Minister seem institutionally committed to restoring AIB and Bank of Ireland to the role of all-dominant, privately owned shareholder banks with a stranglehold over the entire Irish economy. If only they showed the same commitment towards rejuvenation of the credit union movement, expanding SME lending outside the Bank of Ireland-AIB-Permanent TSB monopoly or restoring the diversity of financial services provision in Ireland. Events in banking in 2021 have once again exposed the shortcomings of the strategy of shoring up the pillar banks while hoping the credit unions and post offices will fill in the gaps. A second tier of banking, with local knowledge, between the level of the credit unions and the three big banks would make a significant positive difference to the Irish economy. The massive deposits in credit unions nationally show the appetite for community banking. However, the tiny proportion of those savings that is on loan productively in the community shows the limited capacity and skills in the sector to open up a full community banking service.

At a time when the viability of much of the post office network is being called into question, it is amazing that the possibility of looking to expand An Post as a community bank is not being considered. While An Post is increasing its financial offerings and has a significant network of post offices in areas where there is no bank branch within 5 km, it does not provide services at the level or scale needed. Perhaps the most obvious choice of a model to copy is that of the Sparkasse in Germany. It is an EU-based model and, as such, falls under the same regulation as Ireland. Representatives of the Sparkasse system have long expressed a willingness to consult with Irish officials and help us to get started.

Any proposed forum on the future of banking must examine community banking, both in terms of increasing the capacity of credit unions and the question of whether we need to establish, at regional or provincial level, larger community public banks to fill the gaps in financial services that will only widen further in the coming years, when the three remaining banks return to private ownership and withdraw services from communities.

This debate is an opportunity for the Department of Finance and the Government to reimagine their role in the context of banking in Ireland in the future. It is also an opportunity for us to set out a policy that will attract the type of banking being demanded now by the general public and, indeed, by the banking system itself.

To bring change to fruition, we need to look back over the legacy issues that remain in the banks at present. Bank of Ireland and AIB are the main banks to be considered in this regard and both still have legacy debt. We were told this week by AIB that it has reduced its bad debt in terms of mortgages and loans down to €4 billion or less. The bank has focused very aggressively on the reduction of its exposure to bad loans. It has used vulture funds, as others have done, to sell off those mortgages and correct its balance sheet.

There are other issues remaining to be dealt with that tell us much about the banking system. For example, there is the EBS tied agents issue, which was before the High Court and which witnesses from AIB addressed at a meeting of the finance committee yesterday. In 2019, the judge in that case suggested to AIB that it should use mediation as a commonsense way to approach this problem, in which two parties have differing opinions. At the finance committee meeting yesterday, the AIB representatives refused to answer the question as to whether the bank will go into mediation. A significant number of the EBS tied agents appeared in the Public Gallery at a previous meeting of the committee and some of them have since died. How long more must they wait for the resolution of a problem that a judge has said could be resolved through mediation? This issue shows AIB at its worst. It shows it protecting the system, ignoring those who have been offended in one way or another and simply trampling on any possibility of a commonsense resolution.

The other issue facing the banks is the proposed forum on banking. In fact, it is an issue facing the Irish people rather than the banks. This was discussed recently at a meeting of the Fianna Fáil Parliamentary Party, where I put forward put a motion, influenced by a similar motion that came through the finance committee, calling for a forum of all stakeholders, including the fintech companies and workers, to discuss what the banking landscape should and might look like in the future, if Government policy were to accommodate it. The motion set out the reasons for holding such a forum. It mainly stemmed from the issue that arose when Ulster Bank told its customers at the very last minute about its proposals and showed complete disregard and disrespect for its employees. Representatives of the Financial Services Union came to the Fianna Fáil Parliamentary Party and made their case for a forum, out of which our motion arose. My party colleagues were amused that the Taoiseach supported the motion, because I presume it was my motion, but he did. Therefore, we should be discussing in this House establishing the forum and wasting no time in bringing together all the stakeholders to discuss what might happen in the future.

I mentioned the legacy issue but I omitted to mention Mr. Tony Lawlor, who came before the finance committee as a witness and spilled out his whole life history in the context of his engagement with Bank of Ireland and the courts. That is part of the tracker mortgage issue and it is still not resolved. How many more such cases are still to be resolved by the banks, which are dragging their heels and dragging individuals - citizens we represent - through the courts and through a life of misery just because they can? That must be stopped. I call on the Minister for Finance, who has a significant shareholding in AIB and Bank of Ireland, to intervene in the tied agents case and bring about a resolution. I call on him to intervene in tracker mortgage cases such as that of Mr. Lawlor and bring about a resolution. Then, proactively as a modern Department of Finance should, it should bring together all the stakeholders and let us have the debate through that forum and on the floor of this House on an ongoing basis. Doing so will not harm the banks. It is supporting the notion that we want better banking.

We want citizens' banking and community banking. Through the forum, we want to find a resolution to all of those questions. Reference is regularly made to community banking. In fact, members of the finance committee, including the Minister for Public Expenditure and Reform, Deputy Michael McGrath, visited such a bank in Germany and were impressed by the fact that the profits the bank makes in the regions it represents go back to the community. That is the type of banking that is being sought.

With Provident gone out of the market, we need the credit unions and community banking to take up the slack created by its departure because people with no money and poor means need to get loans from time to time and they should not have to turn to moneylenders to do so. We need to stop that practice just as much as we need, on the other end of the greed scale, to stop vulture funds from doing what they are doing with regard to those who owe money. Likewise, there is an opportunity for the forum to discuss the role of receivers and the use of receivers and what has happened in the past ten years from which we can learn, such as the fact that those very same receivers, who are not regulated, were used by the banks and blackguarded customers across the country.

Let us consider the Central Bank Bill the Minister says he is bringing forward. Is it not about time to recognise all that is being said in this House about credit unions and all of the support given to them by the Minister of State, Deputy Fleming, and to make a special case for them to be included in a regulatory framework other than that in place in respect of banks? They deserve to be given a lighter framework with lesser bureaucracy and a greater opportunity to participate in their local community by giving loans, by understanding the demand from the community and their customers and being able to respond to that. Is it not time for the Central Bank, under the Bill the Minister is bringing forward, to change its customer representation? It is not just a regulator of the banks; it is also supposed to be a protector of the consumer. That is not happening and we need to understand that.

I believe the forum can achieve balance in terms of the arguments on any of these issues and reach a sensible conclusion based on the new developments in banking that will satisfy the citizens we represent. However, we can no longer leave the banks to imagine their own banking landscape for the future or to devise their own structure for the future. We have seen what they have done to this country and its citizens in the past. I do not want them to have the upper hand again in terms of how they might treat their customers should anything happen to the banking models for the future. We need protections for people as much as they are needed for the banking structure and we need the same protections built around a community banking structure.

It is true to say that community banking organisations such as Sparkasse or Kiwibank are almost the same as the credit union system, so that Central Bank legislation should open up possibilities for credit unions. It should also offer greater protection to risk managers within banks or financial institutions in order that we never again have a case such as that of Jonathan Sugarman, a man whose life was destroyed just because he came forward in accordance with legislation and made a case to the Central Bank. Now, rather than the offending bank being in difficulty, the employee is in difficulty. He has not been employed since Banca d'Italia left the country or he had to resign because of ongoing issues with the bank.

There are many areas that we need to cover and I hope these statements on the future of banking are simply a first step. I urge the Minister to take the next step and bring about reform.

I welcome the opportunity to speak on the future of banking in Ireland. This conversation is long overdue. The withdrawal of KBC and Ulster Bank from the Irish market was recently announced. In March, we had the announcement that 103 Bank of Ireland branches across this island will close. The bank is closing one third of its branches, including those in Kilcullen and Monasterevin in my constituency of South Kildare. The announcement was not surprising, but it was very disappointing. It was not surprising because the banks have been pushing people away from their branches for years. They have consistently reduced front-facing staff to turn people away from branches. These bank closures affect the most vulnerable in society, such as older people and families on low incomes. They also affect struggling small business owners. These people, along with rural dwellers, will have the greatest difficulty in adapting, due to the poor availability of affordable broadband.

Sinn Féin has consistently called for the establishment of a forum on the future of banking. Such a forum would enable industry experts, stakeholders, and customer representatives to consider the state of our banking system and plan a more effective future. We must be more proactive and less reactive. We must strengthen the powers of credit unions. I am a proud member of a credit union. They do amazing work on a voluntary basis in every community across this island. We need to give them and post offices a greater role in our banking system. They are rooted in their communities and are best placed to help the local areas of which they are an integral part. Credit unions should be given limited capacity to provide mortgages. They should also play a greater role in funding the building of social housing. We should create a mechanism by which credit unions could invest in social housing. Credit unions could play a very important role in helping the country to meet its climate change targets by providing funding for a national retrofitting programme.

We need a strong banking force to counteract the indifference of the current commercial banks to their customers. Sinn Féin believes this should be a community banking model which can best fill this role and has published a policy document in this regard. The issue of public banking has been on our agenda for several years. The Minister may refer to the Indecon report of 2019 and how it dismissed the need for a public banking system because commercial banks were fulfilling the role but that is no longer the case. There have been fundamental changes in the market with the withdrawal of Ulster Bank and KBC Bank, as well as the Bank of Ireland branch closures.

The Government must engage with credit unions and post offices to explore the possibility of utilising their existing infrastructure for a new public banking system. Colleagues have referred to the Kiwibank model in New Zealand, where banks and post offices share the same building. It is an example of how existing infrastructure can be used for banking purposes. The Sparkasse model has operated in Germany for 200 years as an interconnected network of 390 individual local authority-owned banks that, between them, operate 12,000 branches. It offers long-term SME loans at a 3% interest rate, while its best mortgage rate for home buyers is 1.1% fixed for ten years. We need banks that operate for the benefit of their customers rather than feeding off their misery.

Finally, I will briefly comment on the withdrawal of Provident, a moneylender, from the Irish market. In a rare parting gift, the lender has stated it is writing off any remaining debt owed by its customers. That is to be welcomed but I worry about the next time its clients need a loan. A solution must be found so that they do not have to resort to unsavoury characters in order to pay for first communions, or confirmations or, indeed, if a household appliance such as a fridge or an oven breaks down. Community banking is that solution.

It has been 13 years since the 2007-08 crisis, a crisis for which people paid a significant price and at the very centre of which in Ireland and around the world were the banks and private banking. However, it seems that almost no fundamental lessons have been learned because in the aftermath of that crisis, as well as massive austerity being heaped onto ordinary working-class people, the banks were bailed out and nationalised in order to save them.

Since then, we have been on a road back to private ownership of the banking system, bit by bit. They are being restored to profitability and then put back into private hands. We are going in a circle, not in precisely the same way but with many similarities, back to where we were. We have a banking sector that is increasingly seen to be an oligopoly with three main banks which dominate it. All of them operate 100% on the basis of profit maximisation.

From a socialist perspective, the most basic point is that private banking does not work. It works for the private bondholders while they are making profits, but it does not work for the workers of the banks or the ordinary people who want, for example, to be able access banking services in their local communities. It does not work from the point of view of society and the economy as a whole and from the perspective of ordinary people. Banks will pursue their own profit, regardless of the expense for the workers, communities, society and the economy at large, regardless of the consequences. That is what we saw 13 or 14 years ago. It is what we will see again.

The alternative is very simple. The banking sector should be in public ownership and should be nationalised. It should be run democratically and as a public utility. The idea is that instead of running large parts of the economy as a service for the banks, we should run the banks as a democratically owned public utility in the service of the economy and society as a whole.

Taking some of the arguments that are made for why we need private ownership of banks and why that it is so important, the argument is often made that banks advance credit to small and medium-sized enterprises. However, the figures are striking as they show how little credit has been advanced to SMEs in the last year, for example. Some €4.1 billion was advanced in credit to SMEs in the last year, amounting to a decrease of €1.3 billion or a fall of almost 25%. It is the largest annual decline since records began. If we look at where the lending is actually going, the vast majority of it is going to large enterprises. A portion of it is going to SMEs, which is not included in the figure of €4.1 billion I previously mentioned, the majority of which is property related. The banks are still just financing property. It points to the fact that private banking is not playing much of a role in terms of productive investment in the economy. It is still mainly focused on property investment, even if it has largely cut back to its traditional core business of residential mortgage lending, in other words, fleecing workers who are trying to buy a home.

I made the point earlier that banking has changed to some degree. One of the ways it has changed is in the commercial property side. A large element of the crisis in 2007 and 2008 was caused by a small cartel of developers defaulting on large speculative commercial property loans after property prices rose so high that the property bubble burst, leading to the collapse of all the main banks. Commercial property was a central activity of the banks at that point in time. Without regulation, the banks continued to lend bigger mortgage amounts to ordinary people to make bigger profits on the interest, as house prices lost all connection to wages. However, first came the defaults on commercial property. After that, ordinary people began to default on their mortgages as a result of the ensuing collapse of the economy due to the impact of the State bailing out the banks to pay for the property bubble. The commercial property market collapsed in the aftermath. Then came the austerity and the slashing of public spending to compensate for the fact that the banks were effectively bailed out. Massive job losses and so on, went with that.

Something interesting that has changed in the property market is the shift to vulture funds. The majority of commercial property is no longer funded by the private banking sector. Instead, the Government quite consciously rolled out the red carpet to vulture funds so that they would lend to developers instead and therefore the State would not be on the hook for losses. Of the supposedly fundamental aspects of the banks, for example, providing credit to small businesses and ordinary people, there is not much of happening in that regard. In reality, the vast majority of it is still related to property, either building it in terms of businesses or mortgages. No matter how the rules of the capitalist casino are rejigged after each disastrous new crisis, the house always wins. This time, it is US vulture funds and corporate landlords. Last time, it was Irish bankers and property developers and small-time rack-renters. That is why we need a fundamentally different system.

This is a most important debate. As a newly-elected Deputy, I was in the House on the night the bank guarantee was put in place. I recall the alarm it raised and the shock it caused among all of us. That night, no one actually knew what the real implications were. We were looking at the balance sheets of the banks. There were loans, but we had no idea of the underlying value of the loans. I sat on the banking inquiry. Ultimately, we found that the banks at the time had lent in a reckless fashion.

We can never go back to that situation again. There are elements present at that time which are relevant to the current period. I wish to reflect upon the fact that the Department is about to carry out a banking review. The Minister of State will appreciate that terms of reference are everything. I hear that many reports will be produced. The Minister of State can give the reports as many titles as he wishes. I am only interested in one thing. I want to know what the terms of reference are. There have been many such banking reviews. Following the latest review, I would like to see a report that is small in size, rich in content, action-driven and complete with timeframes. I do not want to see a 400-page or a 500-page report. I know that the Minister of State will appreciate that, given his background. We know what the issues are. I want to see a report that explores how we tackle them.

I will put my point into context. Deputies referred to housing and the banks only lending for property and residential homes. One of the issues currently is that there is not enough supply. Back in 2005 and 2006 we were building nearly 90,000 units in Ireland. If we are to believe what the building trade is telling us, we only have capacity to build one fifth of that figure now? How has that situation arisen? Building 90,000 houses was not sustainable. Banks should not have given out the money for that. It amounted to throwing paraffin on a fire. Currently, many small builders cannot get finance from banks to build houses. Many of those houses are not becoming available for first-time buyers to purchase, as I would like them to be.

In everything, we need balance. We need social housing in abundance, we need first-time buyers, and we need the rental market. That balance is needed at all times.

I want to focus on the areas of the banking system the Minister wants to consider. He spoke about the gaps in the market. Others have said the banks are only lending in respect of property. We need to build homes so it is a question of what the capacity constraints are. Is it a matter of tradesmen and tradeswomen? Is it a matter of materials, whose costs are increasing exponentially, as Members know? Is it a matter of a lack of access to credit for the builder building 20 or 30 houses? Are those in that category unable to get funding from any institutions? Are we suddenly finding that, in many cases, some properties and apartments are being bought in bulk rather than by the first-time buyer, which is a group we need to look after? One reason house prices are increasing is a lack of supply in this sector. I feel strongly about that.

Terms of reference are vital. They would have to be very tight and action driven. The current state of play will be the first matter. We must examine what we have in the sector. The Minister referred to the sectoral expectations. I assume he is talking about the banks and financial institutions themselves. I am more interested in what the economy requires from the banks.

The Minister referred to gaps in terms of competition and consumer choice. We are undergoing enormous change and the fintech companies are coming in. Investment funds are also involved. There are three other components, one comprising the commercial banks themselves, namely, the pillar banks and other banks. Ulster Bank is pulling out of the Irish market. KBC is going. Another component comprises the credit unions and post offices. Bearing in mind the actions of Ulster Bank and the requirement for a third force in banking, one concludes that that force must involve Permanent TSB. Permanent TSB and Ulster Bank are a perfect fit in many ways because their branch networks are almost identical. It is quite extraordinary. I sat down to examine them. If Ulster Bank closes a branch in a town, it is likely that there is a Permanent TSB branch in the locality. That is a positive. What does it require to ensure Permanent TSB can become a genuinely competitive force among the other banks? Those hard questions need to be asked. We cannot have circumstances in which it is perceived that there is a lack of competition. That is important. Therefore, we need a third force. That third force has to be built around Permanent TSB. The beauty or benefit of Ulster Bank going is that Permanent TSB is more or less in the same locations.

The second component involves the credit units. Credit unions have a major role to play. We have examined various financial models for the credit union movement. The movement gives a network, a solid deposit base and local knowledge. I was in practice for many years. In many cases, many of my clients survived not because of support from the pillar banks but because of support from the local credit union. The credit union helped in a small way by giving them a draft at the start of the month after the bank had refused an overdraft facility. The credit union became the banker of last resort for many small businesses, many of which are surviving today. Therefore, we must seriously consider the incremental role the credit unions can play in personal banking. They are doing elements of mortgages. They can become another force. I see no reason there could not be a fourth force involving the credit unions because competition is very much the lifeblood of the sector.

The Minister, in his speech, spoke about the roll-out but I did not hear timeframes for the establishment and completion of the banking review. I did not get an indication as to who will be appointed to carry out the review. They will need to be top consultants. I would like the review to entail public consultation with stakeholders throughout the country because, ultimately, the Irish taxpayer saved the Irish banks. There is no doubt about it. On the night of the guarantee, the Irish taxpayer, including those who pay VAT and not exclusively those who pay income tax, underwrote the banking sector to save the banks, which they had to do. We would have to question whether Anglo Irish Bank was systemic at the time but we are where we are.

What I want to know are the terms of reference, timeframe and conclusion date of the broad-ranging review. Will the report be action-based? Will it take into account all aspects of the banking system? The fintech companies have a role to play also. It is critical that there be a public consultation element to the review. We need to see top-class consultants involved. It will result in a document that the Department and Minister should take possession of. It must be action based and have timescales. What we want at the end are four banking forces - commercial banks, the two pillar banks, Permanent TSB and the credit union system - competing with one another in the best interest of the consumers in Ireland.

There is no doubt that the banking sector in Ireland has been heavily impacted over the past 15 months. Unfortunately, the impact has been felt mainly by customers, particularly some of our older citizens. Over the past month, we have heard announcements that Bank of Ireland is closing 88 outlets across the State. These outlets offer an important community service, particularly to those who are not confident about or who do not trust the Internet for their banking. A visit to the bank is an important element in the week of many older citizens. The weekly food shop and the meeting with friends are often organised on the day on which they do their banking activities. These individuals, who are often pensioners, were the small business owners of yesterday and they were perhaps the most loyal customers of the banks. Many have been loyal to one bank throughout their lives. The decision of Bank of Ireland is, of course, a commercial decision but it is a decision that seems to have been made with scant regard for their most loyal customers.

Some services are to be made available in local post offices. While that is a welcome decision, the full repertoire of banking services will not be available in the post office.

One of the branches due to close in Limerick is the Bank of Ireland located in Roxboro Shopping Centre. Here there are shops with little shop fronts and small enterprises that are reliant on the footfall generated by having a bank nearby. I suspect the closure of this branch will, unfortunately, cause difficulties for those entrepreneurs who have established themselves at this location. It is worth remembering that research suggests that bank branch closures reduce SME lending growth by 63%. This is an added stress for an area that is one of the most deprived not only in the city but across the State.

Bank of Ireland should have delayed both the announcement and implementation of its decision until after the Covid-19 pandemic. Bank of Ireland is not the only banking institution that has made such a regrettable decision during the pandemic. Its decision quickly followed Ulster Bank's decision to exit the southern market.

It is welcome that we are discussing the future of banking today. It is an issue my party has been eager to discuss. Banking is changing and we need all the relevant stakeholders to be ready for this change.

To that end we in Sinn Féin have been calling for a future of banking forum to be established so that these changes and a banking response to them can be discussed. I hope the Government is willing to establish such an important banking forum and that it does this as soon as possible.

Banking in this State faces some major challenges over the coming months, challenges that need to be addressed head-on. To my mind they include how the banks continue to respond to the Covid-19 pandemic and to the legacy that the impact of the virus will leave. As regards effective and continued regulation of the sector, we are all too aware of what can happen when such oversight is lacking.

How do we utilise other resources such as credit unions and tackle the scourge of both legal and illegal moneylending. We have not had a public banking system in this State and this is something that I would like to see change. In Germany there is the Sparkasse group of savings banks, the first of which was established in Hamburg in 1778. It was created out of a need to invest in the country and to maintain as close ties as possible to local communities. While we may not have a State banking system in this State we have An Post and credit unions.

The credit unions, of which I am a proud member and have been for years, are an important institution within the communities in which they operate. If the policy existed we could utilise these pillars and model them on the Sparkasse example. Creating this as another banking pillar could offer a competitive opportunity for people across the State. The creation of such a system could create a banking opportunity that is sensitive to the needs of citizens and not to those of vulture funds.

Providing banking services via our post office network would provide loans and mortgages at lower and affordable interest rates. Profits generated could be reinvested back into local communities and could give a lifeline to the struggling post office network.

The Minister of State will be aware that the Provident personal credit company has thankfully decided to leave and cease its operations but we need to be wary of what might come after that. The concern I have is that the void that it leaves in some of the most disadvantaged areas across our State will be taken up by regular and licensed moneylenders who gouge their customers or, unfortunately, be taken by illegal moneylenders who are worse. Some of the most deprived people who are struggling for money and have a problem with a communion or where an electrical appliance breaks down have nowhere else to go for money. We need to ensure that we legislate properly and that people who are illegally dealing in moneylending have to be stamped down on as fast and as strongly as we can to put them out of business. While we discuss the future of banking we have the opportunity to discuss these issues and provide protection and confidence to our citizens.

In conclusion, we as legislators have a great deal of work to do on banking. A positive step that the Minister of State could take would be to establish that forum which we talked about that could assemble the views of stakeholders and qualified experts so that we can future-proof banking in this State. We need to get it right as we all know what happened when it went wrong, where hundreds of thousands of people emigrated, many never to return. We never need to go back to that again. Gabhaim buíochas.

I thank the Leas-Cheann Comhairle. The current state of our banking sector is a major cause of concern and has a big impact on many other aspects of our lives, most notably, the housing crisis. In recent months we have seen moves by Ulster Bank and KBC to leave the Irish market. A struggling banking sector with a lack of options and availability in the mortgage market makes affording a house beyond the reach of many people on decent wages. If we can do anything here to help revitalise our banking sector then it should also help to address some of the problems in our housing sector.

We need to ask ourselves why banks have withdrawn from the Irish market. Usually, when a business withdraws from a market it is because it is no longer able to make a profit. If those banks who have left the Irish mortgage market were no longer able to make a profit in Ireland then we need to examine why this is so and take whatever steps we can to create the conditions where Ireland becomes an attractive place for banks to do business. Many of the regulations on lending and mortgages were introduced as a result of the banking crisis and bailouts ten years ago. We must recognise that that level of Government intervention in the market is not sustainable in the long run and we are seeing the consequences of that now.

If we take the average Irish income of about €38,000, the maximum mortgage that a person can get is €133,000. If the person had a 10% deposit then he or she can only afford to buy a house costing €150,000, which is almost impossible to find. Prices are rising but incomes are not rising nearly as quickly. That means that the mortgage rules are no longer fit for purpose and need urgent review.

We must also note that in the past it was more common that a person would get a job for life on a permanent basis at a reasonably young age. The rise of zero-hours temporary employment contracts and things like rolling fixed-term contracts make being able to qualify for a mortgage much more difficult. The housing crisis will only be solved by creating the conditions for increased housing supply through a planning policy that is sustainable and viable, alongside increasing people’s ability to buy a house via appropriate lending rules. Both of those things require a healthy banking sector so that house builders can access credit to create the supply and house buyers can access credit to buy.

I have spoken so far about the link between banking and housing but there are obviously many other reasons a healthy and competitive banking environment is essential. Banks play a vital role in injecting money into a struggling economy. God knows how big the struggle will become once the Government eventually decides to stop shutting down sections of economic activity for months on end. When a bank or credit union lends a small sum to an individual it is because that individual wants to spend it on something, thus creating an income for the person selling whatever it is.

I wish to mention credit unions here also, of which I too am a member. They play a vital role in our financial sector, developed by the people in an area and working for the benefit of the people in that area. Credit unions on the whole are a fantastic example of community co-operation in action. I can see a more prominent and expanded role for credit unions in the Irish banking sector in the future.

I understand that we are currently in the process of selling off our shares in Bank of Ireland. Irish taxpayers invested a great deal of money into this bank to ensure its survival over a decade ago. I hope that the Minister of State and the State will not sell these shares in a bad deal for the taxpayer. We need to see a good value for money return on those shares, even if it means holding off until their value increases. Hopefully, it will lead to a situation where a healthy and vibrant banking sector can develop in a sustainable way without the need for the State having to ever again provide rescue supports.

We have shown over the past 15 months how quickly important laws can be rushed through this House. I am not advocating rushing anything through. However, reviewing and, if necessary, amending rules and regulations in the banking sector to be more reflective of the current situation could and should be done swiftly. It would also be likely to increase the possibility of attracting new companies into the Irish banking sector.

We have to examine if some of these restrictions can be removed or amended to encourage the return of competition into the banking sector. Competition in any sector mainly benefits the consumer. The current lack of competition in the market is bad news for the consumer. Lack of competition not only reduces the number of products available but it also means that the remaining firms have less incentive to provide competitive deals to customers.

We have heard in the last year or two whispers about creating a State bank. Why can we not just create the conditions where existing banks will be encouraged to return to the Irish market. I fear that a State bank will become an endless money pit, similar to the HSE, which will further erode competition and choice for the consumer. The banking sector needs to be competitive if we, as a nation, are to have any chance of being competitive on the European and world stage.

We have seen the disastrous effects of the lack of competition within the insurance sector. We saw many businesses decimated and fail because of an exorbitant and price-gouging structure within insurance. It has taken all of five years from when I first travelled to meet the competition authority in Brussels, the Directorate-General for Competition, to ask it to investigate the matter. We now have a preliminary finding of anti-competitive practice but it is too late for many who did not have the moneys available to facilitate the lack of competition and exorbitant charging. I am calling on the Government to act in time on this and not to ignore it as the Competition and Consumer Protection Commission did on the insurance issue, which is why I had to go to Brussels in the first place.

The Government must put a framework in place that ensures competitive trading practices in the banking sector. That includes attracting new banks, resourcing post offices and increasing the financial remit of the credit unions. Our very survival is in the balance and if this does not happen then the Government can close the door behind it. I thank the Leas-Cheann Comhairle.

I am delighted to get an opportunity to speak about banking reform on behalf of the Rural Independent Group. It is a huge issue, especially in light of two banks wanting to leave our country and having their minds made up but also in light of Bank of Ireland recently closing branches in Dunmanway and Bantry, in west Cork. That has been a devastating blow to those towns, which had been loyal to Bank of Ireland, and to the people who live in the surrounding areas: on the peninsulas, in the surrounds of Bantry, Castletownbere, Kilcrohane, Sheep's Head, Mizen Head and Beara, out into Drimoleague and Dunmanway and all the way down into Ballineen and the Skibbereen area. These people stood loyally by the banks down through the years, and those banks have treated their customers shoddily. I come from an area that lost a bank, the AIB branch in Schull. Such a closure has a devastating effect on a town. Within a year the local supermarket in Schull closed, with a loss of, I think, 17 or 18 jobs in that local community, so such closures deal a devastating blow in local communities. The problem is that it does not look like there is a lot of confidence in the banking sector at present when banks are leaving our country and local banks are being closed.

We have to look at the credit union as a way out. It is stated in the programme for Government that the Government will review the policy framework for credit unions. Where is the Government with this review? For some reason in this country there were powers that be in previous governments that made sure that the credit unions could not compete. They are ready to compete, to offer mortgages and to work with customers for those mortgages, which are badly needed, and they have an excellent record. I met with the Bantry, Bandon, Skibbereen and Dunmanway credit union managers recently to try to see whether we can further this for them in the Dáil, get the Government to see sense, forge ahead with the policy framework, make the changes and allow credit unions to compete in the market. I would appreciate it if the Minister of State would explain how far we are from that. What kinds of changes will be made?

We should also look at the post office sector. Post offices are closing their doors in rural Ireland and haemorrhaging and they need support. I would like to see the vision the Minister of State has for the post office sector. Post offices deserve better. The postmasters and postmistresses out there serve their communities. There are opportunities there and we are not availing of them. The Minister of State might give us an insight into that. Instead of focusing on closing doors, maybe we should focus on better opening the doors that are already there.

I will give my colleague the remainder of my time.

When the funding was being made available for Covid-19 supports, the Government announced the five pillar banks through which it would send out the funding. It never mentioned the credit unions. I mentioned this to Ministers when the five pillar banks were mentioned. Like other speakers, I am a credit union member. The credit union and the post office are the last two banking systems in Ireland that have people behind the counter who know you by name. You are not known by number there. You walk into your local credit union, you know the staff behind the counter and they say, "Hello, Richard. How are you? How was your day?". The banking institutions, however, have all gone online. Let us tap this and tap that. If you ring them up, you are asked for your account number and, no matter where you are calling from, you could be talking to somebody from Dublin through a banking system. The one banking sector that has stood alongside us through Covid, the only people who stood by us through Covid, when the banks turned around and said, "We will extend your loans but you will still have to pay off your interest within the term", and the only ones who made concessions to us were the credit unions. They turned around and said they would extend loan terms and they extended them but they did not do as the banks did. The banks extended loans by three or four months but told customers that if they had a five-year loan, they still had to pay off that loan within the five years. This meant that when things picked up the customers had to pay more, even though we were in an economic crisis because of Covid. The credit unions turned around and said, "We will give you the three, four or five months but we will add it onto your loan and give you the break now that you do not have to pay for two or three months."

The other factor that has to be taken into account here is that the legislation that comes down through the credit unions from central banks and so on is over the top. Did the Minister of State know that the boards of all these credit unions are made up of volunteers? They are local people in local communities who have volunteered to go on those boards to look after the parishes, towns and villages around them. They are all volunteers. Everyone in the top tier of the banking sector, however, takes the cream off the top and gives nothing back, taking the big money at the top. The volunteers who run our credit unions, however, are local people who know where the local funding has to go back in. If the Minister of State does anything, he needs to help the credit unions so they can come back and give the funding to the householders who want to build at an affordable rate. The central banks are making it far too hard for them while they compete with the present banking system.

The Irish banking system, based on for-profit private banks, failed disastrously in the financial crash of 2008 and 2010. The State was forced into a €70 billion bailout paid for with a decade of austerity, seriously impacting public services and, of course, a situation in which many homeowners lost their homes. This was a consequence of extremely risky speculative spending in a drive to maximise profits. Despite the bailout, we have since had the tracker mortgage scandal and there has been an exodus of foreign banks, leaving just two big banks now completely dominant in the State. One of these is AIB. It is effectively State-owned but continues to operate as a profit-driven private enterprise. There is an opportunity to transform AIB into a State-owned entity with a mandate to play a key role in the development of a sustainable economy through more strategic investment policies.

However, we also need a third banking force. The Public Banking Forum of Ireland has been arguing for such a third banking force since the crash, basing its ideas on the German Sparkassen public community savings banks. Four hundred of these public community banks account for 40% of the retail banking sector in Germany. They are key to the German SME sector, which is itself the key factor in the German economy. This is not a new idea in Ireland. In the early 1820s Ireland had as many as 65 community-based savings banks in its cities and larger towns. These savings banks were much like the early English savings banks of the 1800s, which were not much different from the German Sparkassen. The Public Banking Forum of Ireland proposes that credit unions co-operate at regional level to institute regional public savings banks in co-operation with An Post and local community organisations. The idea is to create ten regional alternative banks with a focus not on profits but on customers and lending to customers, small farmers and small businesses. This would address and counter threats to services in rural areas such as closures of post offices and so on.

I do not have time to develop these proposals fully, but the Government must look at this area.

There is no doubt but that the way in which banking is done in Ireland is changing. I think this will cause the biggest problem for the Central Bank and the Department of Finance in how they manage the new arrangements when there are so few pillar banks in the State. It possibly forces them to look at new operators and a system that some of us in the Opposition have been pushing for some time. If it is looked at properly, it can provide an opportunity for citizens to access equitable finance. Credit unions can and do provide a financial system that citizens trust and want to see do more. My local credit union is now offering mortgages, and if I am going to look for a mortgage or mortgage finance there is only one place I will look for it. I would view it as an honour to owe money locally and see the profit made on my loan going to help other local people. It is not such a revolutionary idea but it would be revolutionary for Ireland. It is to be hoped the State will get fully behind banking in the community. One thing we have seen in this country is that the banks do not care for citizens or their workers.

They have striven for profit for shareholders. Even when we the people have been shareholders, the Government was not interested in reflecting our needs either. For many years people on the fringes of the banking system, as the Minister would see it, and Opposition Members have pushed for the accommodation of credit unions and the post offices in the banking system to serve the needs of people. The State has resisted it as much as possible, and made it as difficult as possible for them to provide services. It must have been in the hope that the banks would ride in and head them off. Now that we have seen that will not happen, maybe the Government will embrace the new reality and make the credit unions and post office network the new solution and put as much effort into helping them as they have in the banks in the past.

I will concentrate on just one aspect of the future of banking: the role of credit unions. I acknowledge the Minister of State's positive comments on credit unions and those made by many other Deputies. The programme for Government makes the commitment to enable the credit union movement to grow as a key provider of community banking in this country. I ask the Minister of State what has he done and what will he do to ensure to deliver on that promise.

Legislative change is essential to deliver on that commitment. I have just two suggestions. The Credit Union Act, as amended in 2012, is a child of the financial crisis. It failed to introduce proportionate regulation. We need legislation that is appropriate for credit unions, proportionate to the risks involved and ensures adequate capital reserves for credit unions. The current Act uses a sledgehammer to crack a nut and it is failing us. Our banks cost is €60 billion or €70 billion plus, and they needed strong regulation, but credit unions were very different. I recall the then Minster for Finance, Michael Noonan, saying there was a €500 million black hole underneath the credit unions. That was not true. The league's own funds covered the majority of any losses. I suspect our State is probably in profit right now because of the levies they imposed on credit unions to pay for future losses. Credit unions have paid their way.

Second, the register of credit unions must be fully independent. The Central Bank should not be the regulator. There is a possible conflict of interest and I believe the Minister must change that. The Minister of State has a golden opportunity to serve the citizens of this country by ensuring that we have a strong community banking sector underpinned by credit unions. If he does that, he will keep the promise that this Government made to the people.

I thank the Deputies for sharing their views. There were 16 or 17 speakers, which indicates the significance that Members attach to this issue. Sessions such as this show the range and volume of issues that require consideration when there is an attempt to dissect a system that touches on so many elements of our daily lives. It is also a very good reminder of the pressure that banking is under due to changes in technology and regulatory requirements on one hand and the demands on banks by customers who see the world change around them on the other, and who use technology in a way that only a few years ago we would have felt was unlikely.

The way the public interacts with banks, credit unions and other financial providers has changed fundamentally, and this has been accelerated by the pandemic. Many will still need or want to carry out their banking activities in person. Credit unions and An Post have significant branch networks in addition to those of our retail banks. The Government is, and will continue to be, supportive of the financial sector meeting the needs of households and firms to achieve their financial, economic and social needs.

As the Minister for Finance pointed out earlier, the Department of Finance will undertake a broad-ranging review to look in detail at the many relevant issues in the banking sector. We must recognise that much change is under way. Ireland has had a difficult few months with regard to that change. For the review to be a process that will signpost how banking can deliver for society and the economy, we must recognise that people are seeking banking services through electronic and card-based systems. While there is a variety of needs we want to meet, we may have to meet them in a different way in future. We need a process that provokes and invites genuine debate rather than seeks to preserve the present situation in its entirety. I was impressed by a Deputy saying that it was not about preventing branches closing but about opening new doors. That must underpin the review. The future will happen whether we like it and we need to be part of it, to plan for it and be proactive. I assure Deputies that the review will involve extensive consultation with all relevant stakeholders. There is a process to be followed, including modalities and the time scales involved. The Minister will announce its details as soon as practicable.

Many of the issues raised by Deputies overlap with the issues that the Minister and I have been considering all along. We will take on board everything that has been said but we are clear that we want to end up with tight terms of reference that can deliver solid and achievable results in a reasonable timescale. Some asked for that and stressed the importance of that and the terms of reference. We do not want a review that goes on for three or four years because time will pass us by.

In addition to the banking review, the Government is progressing a review of the policy framework for credit unions, which is a programme for Government commitment. I have met many credit union stakeholders in recent months and we will meet again before the summer recess. Many meetings are taking place. When the Bank of Ireland branch closures was announced as well as Ulster Bank's withdrawal from the country, I immediately met with some of the key credit union organisations to put it to them that this was an opportunity as in many cases they will be the only financial institution left in many towns and locations. I am encouraging them to take this as an opportunity to grow small and micro businesses in those areas as well as local customers who may not want to travel outside the region following the bank branch closures.

There is an opportunity for the credit unions and it is important that they actively go after that opportunity and not to wait for a banking review to conclude down the road. The movement must develop, as a matter of urgency, collaborative approaches to develop structures and expertise needed to develop its business model. Some of them cannot do all the mortgages on their own but if a group come together on a collaborative basis, they will be able to provide scale and I am particularly interested in understanding how credit unions can grow the SME and mortgage lending sustainably.

It is not possible to comment on all the points raised in the past few hours but every one has been taken into account. Deputy Mairéad Farrell began by talking about banking culture and public trust, senior executives and accountability. The heads of Bill will be published before the summer. She also mentioned the mortgage resolution process, the exit of Ulster Bank and KBC and the sale of the Bank of Ireland shareholding and the Government's role in that. I stress the bank's independence in this regard is protected by a relationship framework, which was insisted upon by the European Commission to protect competition in the marketplace. A European framework is in place to deal with Bank of Ireland and other key banks. The role of credit unions was also mentioned. Deputy Nash also mentioned the Bank of Ireland shareholding and the need for the forum to be a broad-ranging review.

Deputy Calleary mentioned tracker mortgages and how they contributed to an erosion of trust. Others referred to that as an example of the culture in banks with which other people take considerable issue. Ulster Bank's staff were the last to hear of its withdrawal. We definitely need to have improved communication on key issues that effect people's livelihoods so that they do not hear about it on the 8 o'clock news some morning when they turn on the radio.

Mica and pyrite were also mentioned. The banks were brought into the issue because they have mortgages on many of the properties and they should have been more proactive dealing with their own assets that they knew were not worth the amounts given for the mortgage while their assets were crumbling before their eyes. The discussion on mica cannot be completed without the banks being brought to the table in some respect because while we are protecting people's homes, to some extent we are also protecting the assets of the banks, which have a role to play in this issue.

A couple of Members asked questions about the reason banks such as Ulster Bank and KBC are withdrawing from Ireland and the reason we have no new entrants coming in. That is one of the most fundamental questions that has been highlighted here. It is very easy to talk about branch closures but we must examine what is happening here that banks are leaving because they do not feel it is a proper place to do business. That is an issue we must address. It is not only a problem that banks are leaving the country, but we are not getting new banks to come here. That issue must be examined to make sure that we have a viable, sustainable and competitive banking industry in the future.

It was also suggested that when Ulster Bank, KBC or Bank of Ireland leaves a town they should give the bank to the local community. I suggested that from day one. Many bank branches are in key locations in main towns and many of the premises are in good condition. Local authorities, through the Department of Housing, Local Government and Heritage, should consider possible uses for some of these buildings. The last thing we want to see is the banks walking away. They are such big buildings they will not be easily sold to people in the private sector and we do not want them to become another source of dereliction on streets in so many towns around the country. I ask the Department of Housing, Local Government and Heritage to engage on the issue to see if there is scope for these buildings to be put to good community use or for housing, which would regenerate many of the towns where these branches are closing.

Public banking was mentioned, as were credit unions, extensively. Deputy Shortall said a third of the bank branches in this country have closed or are closing over a seven-year period. That mirrors what is happening banks everywhere throughout Europe and in the United States. There is a bigger picture. That is the reason I said we must ask why banks are leaving. What is happening with bank branches in Ireland is what is happening everywhere. For that reason we must look to the future and open new doors, not try to prevent the doors we have from closing, which has happened in many cases. Local businesses want to have local banks in the area. The legacy debts of AIB and Bank of Ireland are giving rise to issues in many cases. Tied agents were also mentioned.

The legacy of the financial crash was mentioned. What we want to do is talk about the future of banking. We had a major debate here today about the problems of the banks in the past ten years. Resolving the problems of the future will not be done by exclusively focusing on the past. I would like to see much more forward thinking about how young people are doing their banking. Some use cards to get cash. They are also more active customers in some of the new financial organisations than some of the established banks.

I thank all the Deputies for their contributions. Everything that has been said in the debate will work its way into the consideration as part of the terms of reference on the review of the future of banking.