Dáil Éireann Debate, Tuesday - 28 January 2014
175. Deputy Brendan Griffin asked the Minister for Finance the measures in place to attract international banks to set up here and to increase competition in this sector; and if he will make a statement on the matter. [3478/14]
View answerThis Government continues to work to create an environment conducive to the entry of such new entrants primarily through the implementation of policies to promote economic recovery and employment creation but also through different initiatives to ensure that there is an adequate pool of credit to underpin the recovery. This is a theme common to our EU partners. Ireland continues to lead the debate at EU level, on the mechanisms to promote, for example, alternative forms of financing for SMEs.
In this regard:
- we are working to manage and minimise potential market expectations of future State support for the state owned banks which could act as a deterrent to new market entrants
- we are working to establish equality in the assessment of credit risk through the establishment of an industry wide credit register to allow for the appropriate measure of risk in lending, allowing incumbent and new lenders to lend with full visibility of the risk of that lending. The Credit Reporting Act was passed at the end of 2013.
- we are working to reduce switching costs to allow customers to move between banks more easily, enhancing competition and forcing banks to work hard to retain their customers on a commercial basis
- we are encouraging risk sharing partnerships to encourage new lending, such as the AIB/European Investment Bank lending initiative
- alternative innovative mechanisms to involve other lenders are actively being explored and progressed such as the initiative with the German State Development Bank, KfW
- we are in regular dialogue with potential market entrants as they evaluate potential opportunities in Ireland and will be supportive of new entrants as they emerge.
The RBS review by the UK Government confirms the continuing role that Ulster Bank will have in the lending and deposit taking business for all customers here in Ireland. KBC have been expanding their network and their ambitions in Ireland. I believe that it is fair to say that it is not all bad news and that the Irish financial market does offer opportunities to institutions. This Government has also taken steps to ensure that the Irish financial market is accessible to any financial institution considering establishing in Ireland. In seeking to reduce the barriers to entry which are specific to the Irish banking market, Section 149 of the Consumer Credit Act, as amended, which provides for the regulation of bank fees and charges has been disapplied for the first three years in the case of new financial service providers setting up in Ireland.
