Dáil Éireann Debate, Tuesday - 17 November 2020
267. Deputy Ged Nash asked the Minister for Finance his plans to review the arrangements under the relationship framework in respect of the relationship between him and a bank (details supplied) in view of Covid-19 and the upcoming national economic plan; his views on whether the State-owned bank could offer business and personal loans at ECB interest rates; and if he will make a statement on the matter. [36730/20]
View answerAs the Deputy is aware as Minister for Finance I have no role in the commercial decisions made by the banks, including the structure and level of pricing for their various product offerings. This applies equally to the banks in which the State has a shareholding.
Decisions in this regard are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The independence of banks in which the State has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.
I would say however that any suggestions that banks in Ireland or anywhere in the Eurozone for that matter, can offer customer lending rates at zero or close to that level which is where the ECB main lending rate is, are misplaced. Banks fund themselves from a range of sources with ECB borrowing being only a small fraction of their total balance sheet for sustainability reasons. Banks also need to cover their operating costs (staff, IT etc) and the cost of holding capital raised from the debt markets as well as shareholders.
I would obviously like to see borrowing rates that are as low as possible for Irish customers particularly in the current difficult environment.
