I propose to take Questions Nos. 175 and 176 together.
I have been advised by the Central Bank that, in July 2010, the Irish authorities in the context of the final decision of the European Commission on the restructuring of Bank of Ireland, committed to undertake several actions in order to improve competition on the Irish banking market. As part of this programme, Ireland committed to the implementation of a package of measures aimed at supporting competition in the Irish banking market. The Irish authorities agreed to meet, inter alia , the following commitments:
"a. The IBF [voluntary] switching codes for personal and business customers will be placed on a statutory footing immediately, and will be accompanied by an information campaign (to be carried out by the NCA and the IBF), and
b. A review of the provisions contained in the switching code, with a view to making any necessary enhancements, will be carried out by the Central Bank and concluded by end Q2 2012"
In December 2011, under the EU Commission decision (SA.33443) approving the Bank of Ireland revised restructuring plan, the Irish authorities committed to undertake a revised package of alternative measures in order to restore the competition in the Irish banking market by facilitating entry and expansion of competitors and enhancing the consumer protection in the financial sector. In particular, Ireland committed to carry out specific measures in order to enhance:
" (a) Customer mobility and protection (provision of information; transparency to facilitate consumer decision making; financial inclusion);
(b) Entry of competitors (electronic banking, SEPA migration, quality and availability of credit history information and reporting by banks);
(c) Corporate governance."
The specific commitment agreed in relation to switching is:
" The Central Bank of Ireland will:
(i) carry out a review of the provisions contained in the Code of Conduct on the Switching of Current Accounts,
(ii) ensure that any necessary changes to the Code of Conduct on the Switching of Current Accounts following its review will be published by end Q2 2012."
I am informed by the Central Bank that the obligation under the first part of the initial commitment was met with the publication, of the Code of Conduct on the Switching of Current Accounts with Credit Institutions (the Switching Code) on 1 October 2010.
In 2011, the Central Bank began its review of the Switching Code with a theme-based inspection and mystery shopping exercise (the 2011 Review). The inspection was aimed at assessing how well the switching process works in practice for consumers. The mystery shopping exercise was undertaken to determine the awareness and understanding of the Switching Code amongst frontline bank branch staff. The 2011 Review confirmed that once a consumer began the switching process, it generally ran smoothly.
In June 2012 the Central Bank published a Discussion Paper outlining the outcome of the review undertaken by the Bank on the operation of the Switching Code together with possible enhancements to the Switching Code as a result of that review. The Discussion Paper posed a number of questions to interested parties on issues connected with switching and how the Switching Code could be further enhanced or expanded to support the switching process. Interested parties were invited to respond the questions posed in this Discussion Paper by 30 September 2012. A total of 4 submissions were received in response to the Discussion Paper, all of which will be published on the Central Bank's website in the coming weeks. An analysis of responses is currently underway.
The Discussion paper can be found at:
http://www.centralbank.ie/regulation/poldocs/dispapers/documents/120622
discussion paper on switching.pdf
The National Consumer Agency have informed me that their new interactive banking comparisons were launched in October 2011 and the launch was supported by radio and online public awareness campaigns. A copy of the press release is available on the NCA website - http://corporate.nca.ie/eng/Media_Zone/Press%20Releases/banking-cost-comparison.html .
From April to June 2012, the National Consumer Agency ran a campaign to promote switching banking products. This campaign used press, radio and online public awareness activity. The NCA recently made a submission to the Central Bank's discussion paper on Code of Conduct on the Switching of Current Accounts with Credit Institutions which outlines their views on issues concerning switching of banking products.
