asked the Minister for Finance whether he is satisfied that the large increase recently in the number of foreign merchant and commercial banks opening offices in Dublin and elsewhere in the Republic is in the best interests of the people of this country; and whether there has been any corresponding development by Irish banks abroad.
Ceisteann—Questions. Oral Answers. - Foreign Bank Operations.
45.
Irish banks have a substantial interest in the principal merchant banks set up in this country in recent years. Other new merchant banks are subsidiaries of commercial banks which have been in business here for many years and whose record is satisfactory. The number of commercial banks of any significant size established by foreign interests recently has not been large and each has only one office in the State.
The establishment of new banks in which there is a foreign interest has contributed to desirable developments in Irish banking, including the introduction of new banking techniques from abroad and increase of the inflow of capital for use in the development of new industries and tourist facilities. I would not, however, welcome any deep penetration of Irish banking by foreign interests.
As the Deputy knows, fresh banking legislation is proposed. If passed by the Oireachtas it will make all banks, including those fully or partly foreign-owned, subject to close supervision in the national interest as well as in the interest of depositors. There has been no development by Irish banks abroad corresponding to the development by external interests here.
I used the word "recently" in a sense which is obvious. It is obvious that except for a couple of banks like Ansbacher, a Belgian bank and one or two others, not a single private or other bank came into the country up to about ten years ago. This is the sense in which I used the word "recently". The Minister put his own interpretation on it. In banking terms ten years is recently and this is what I had in mind. Could I ask the Minister whether one at least of these banks bought its way into this country? I think it did. Have these banks come to this country to admire our Irish blue eyes or to compete with the vultures from London that we normally have operating in this country in a different way? Could I ask the Minister further whether the amount of money he read out a while ago, in reply to a Parliamentary question, as the amount the Government have now got from the Irish commercial banks— which is completely different from what it was ten or 15 years ago—is not partly due to these banks having come in here?
No. First, I do not think there is any question of these foreign banks coming in here simply because they are attracted by our charm. They come here to do business. I think it is an indication of the progress and development of the country that they now accept that there is plenty of business to be done here. On the other hand, it is important for us to ensure that by and large Irish banking is kept in Irish hands and we intend to ensure that. I think the Deputy would admit that in a sphere of activity of this sort the importation from time to time of new ideas from abroad helps to give everybody a little fillip, helps to pep us up a bit and helps to improve methods and techniques.
I do not think the Minister answered the second part of the question as to whether our banks are making any similar effort abroad?
I did. I said they were not.
Would the Minister not agree that in the short term at least the foreign banks coming in here have been helpful in so far as they have made money available which would not be made available by the Irish banks? Does he not agree that in the short term it has been beneficial whatever about the long term?
I think that by coming in here and competing and by bringing new banking methods and techniques, they have been helpful in bringing about an improvement generally in the Irish banking structure. The Irish banks would probably, in any event, in their own way have improved their methods and techniques but, perhaps, the arrival of these new banks from abroad did help to accelerate the process.
Are they discriminated against?
No.
They are, actually, in regard to clearing houses.
As I told the Deputy before, I have that matter under examination at the moment.