Dáil Éireann Debate, Tuesday - 31 May 2022
180. Deputy Ged Nash asked the Minister for Finance his plans to review his stated strategy to unwind the State’s shareholding in commercial banks (details supplied) in light of a recent European Central Bank paper which cites that a mixed composition consisting of foreign and domestic-owned banks that are controlled by the state and private owners is advisable; and if he will make a statement on the matter. [28056/22]
View answer181. Deputy Ged Nash asked the Minister for Finance if he is satisfied with his stated policy decision to unwind the State’s shareholding in commercial banks (details supplied) in light of a recent European Central Bank paper; if he agrees with the analysis that a fully-privatised banking sector may worsen the impact of crisis periods; if he agrees that Ireland is particularly vulnerable given the ECB paper’s assumptions regarding the small number of banks and lack of competition within the sector; and if he will make a statement on the matter. [28057/22]
View answer182. Deputy Ged Nash asked the Minister for Finance if he will consider pausing the sale of the State’s shareholding in a bank (details supplied), in light of a recent European Central Bank paper which states that a mixed composition consisting of foreign and domestic-owned banks that are controlled by the state and private owners is advisable, in order to conduct a full review of the risks of a fully-privatised Irish banking sector; and if he will make a statement on the matter. [28060/22]
View answerI propose to take Questions Nos. 180, 181 and 182 together.
As the Deputy is aware, Government policy is not to hold the State's investments in AIB, Bank of Ireland and Permanent TSB long term. This country has learned at great cost that banking is a risky activity requiring significant amounts of capital support in times of stress. Therefore successive Governments have held the view that it is the role of the private sector in the main to provide lending and deposit taking activities for citizens and our economy in a well regulated but competitive environment. Subject to market conditions, we intend to exit these investments in a manner that generates value for the taxpayer such that the funds invested can be used for alternative purposes.
Pre-arranged share trading plans are operational for both AIB and BOI which sees the State's shareholding in each bank reducing on a daily basis.
The State has reduced its ownership in all three banks since 2013 with the current shareholdings in each of the banks set out below:
- AIB: <69%
- BOI: <4%
- PTSB: 74.92%
It is important to note that while the State has shareholdings in each of the three banks, the day-to-day operations of the banks are not managed directly by me or the Government, they are governed by Relationship Frameworks. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market. Therefore, as Minister for Finance, I have no role in the day-to-day operations of any of the banks in which the State has a shareholding and this would not change should a decision be made to stop unwinding our shareholdings in each of the three banks. All operational decisions, including lending decisions, are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis.
