Micheál Martin
Question:66. Deputy Micheál Martin asked the Minister for Finance if he will report on the proposal to set up Sparkasse here; his views on same; and if he will make a statement on the matter. [28645/18]
View answerTuesday, 3 July 2018
Questions (66)
Written answers
My Department, along with Minister Ring’s Department of Rural and Community Development, are tasked with 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 there is public ownership, as opposed to private ownership, either by the state or other public body of a bank or other financial institution. The local public banks in Germany are called Sparkassen. The structure of the local public banking system means that these Sparkassen are not permitted to operate outside particular, specified geographic areas. The philosophy of local public banking is not profit maximisation. Instead, Sparkassen aim to promote the development of the local, regional economy of the area in which they operate. An important aspect of the business model of Sparkassen is building relationships and working closely with the SMEs located in their regional area.
A thorough consideration of the potential for local public banking in Ireland, based on the Sparkassen model, has been carried out by officials in my Department and the Department of Rural and Community Development. This work included a public consultation exercise, engaging with stakeholders and interested parties, as well as an 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. Consideration of the proposal of how the German model of local public banking could be implemented in Ireland included a number of meetings between officials from both departments 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 and it was jointly brought 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.
As the Deputy will also be aware, 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.