Dáil Éireann Debate, Thursday - 28 June 2018
104. Deputy Michael McGrath asked the Minister for Finance his views on establishing a public banking model here along the lines of a Sparkasse model in Germany; and if he will make a statement on the matter. [28611/18]
View answerAs the Deputy is aware, my Department, along with the Department of Rural and Community Development, are responsible for fulfilling the Programme for a Partnership Government 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 the state, or another public body, has ownership of a bank or other financial institution, as opposed to private ownership. In Germany, local public banks are called Sparkassen. These Sparkassen are only permitted to operate in specific geographic areas. The aim and philosophy of the Sparkassen is the promotion of economic development and financial inclusion in the particular regional area in which they operate, rather than solely maximising profits. Working closely and building relationships with local SMEs is an important element of the German local public banking model and the work of the Sparkassen.
Officials in both departments have been working closely together to conduct a thorough consideration of the potential for a local public banking model in Ireland, based on the German Sparkassen model. This has included a detailed analysis of a proposal put forward by Irish Rural Link and the Savings Banks Foundation for International Cooperation (SBFIC), the international development wing of the Sparkassen group. The proposal outlines how a local public banking model, based on the German Sparkassen model I have described above, could work in Ireland. This process included a number of meetings between officials from both my own Department and Minister Ring’s Department, and representatives from Irish Rural Link and SBFIC.
The report on local public banking has now been completed. Minister Ring and I circulated the report to all Government departments for comments and observations before jointly submitting it to Government at a Cabinet meeting in May. I am pleased to inform the Deputy that the report has now been approved by Government and I anticipate that it will be ready for publication in the near future.
Additionally, there are already significant Government measures in place to support access to finance by Irish SMEs. These include the Strategic Banking Corporation of Ireland (SBCI), the Supporting SMEs Online Tool, the Microenterprise Loan Fund, Local Enterprise Offices, the Credit Review Office and the Credit and Counter Guarantee Schemes.
Finally, my Department is working with other Government departments to develop tailored and innovative schemes to meet the evolving needs of Irish SMEs, such as the Agricultural Cashflow Support Loan Scheme and the Brexit Loan Scheme I announced in Budgets 2017 and 2018 respectively.
