My Department and the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs, now the Department of Community and Rural Development, are tasked with fulfilling the Programme for Government Commitment to "thoroughly investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions".
Local public banking is where a state, or other public body, has ownership of a financial institution. The investigation of local public banking has consisted of a consultation process with stakeholders and interested parties. There has also been analysis of a detailed proposal on the Sparkassen model and its possible implementation in Ireland that was put forward by Irish Rural Link and the Savings Banks Foundation for International Cooperation (SBFIC), the international development wing of the Sparkassen group. Officials from my Department have met with their representatives a number of times.
In Germany, Sparkassen can only operate in specified regions and their aim is not profit maximisation but rather promoting economic development and financial inclusion in the area in which they operate. A similar model has been proposed for Irish local public banks.
Officials in my Department have been working jointly with colleagues in the Department of Community and Rural Development in order to prepare a report of the findings of their investigation. The purpose of the consultation process and report is to assist the Government in its analysis of local public banking in an Irish context. Officials have finalised the report which I have received and am currently considering.
This report will outline the current banking environment in Ireland, describe the Sparkassen business model, analyse a proposal for local public banking in Ireland, summarise the view of respondents to the public consultation process and set out findings in relation to the potential for a local public banking model in Ireland.
Along with my colleague, Minister for Rural and Community Development, Michael Ring T.D., I will bring the report to Government, for approval. I would like to advise the Deputy that I expect we will be in a position do so before Christmas. Once it has gone before Cabinet, I will also provide the report to the FINPERT Committee.