asked the Minister for Finance the number of foreign banks operating in the country; and if he will give an assessment of the extent of their operations.
5.
Ceisteanna—Questions. Oral Answers. - Foreign Banks.
4.
asked the Minister for Finance the controls exercised over the operations of foreign banks; and whether new limitations or controls are considered necessary.
I propose to take Questions Nos. 4 and 5 together.
The Central Bank are statutorily responsible for the licensing and supervision of banks.
I have been informed by the Central Bank that there are currently 26 externally owned banks licensed to operate in the State. These include branches and locally incorporated subsidiaries. They hold about 34 per cent of the total gross assets of all licensed banks.
Two of the associated banks are incorporated in Northern Ireland and provide a full branch banking service to personal and corporate customers. The remaining foreign-owned banks provide facilities mainly for business and commercial customers in the public and private sector and have only a limited number of offices.
The Central Bank have laid down supervisory requirements and standards for licensed banks. These were last revised in 1981 and were published in the Central Bank Autumn Bulletin of that year. They apply uniformly to all licensed banks including those which are externally owned. In this regard I would point out that under EEC law, in particular the First Banking Directive 77/780/EEC, a bank incorporated in a member state is entitled to freedom of establishment in the other member states of the Community on the same basis as applies to domestic banks.
The Central Bank are satisfied that their supervisory requirements and standards are adequate.
Would the Minister agree that there has been a remarkable increase in the number of foreign banks operating in the State in recent times, many from outside the EEC area? Can the Minister assure the House that effective control is exercised over these foreign banks in directing their lending policy towards productive industry and job creation in the same manner as would be applicable to domestic banks?
There are foreign banks from non-EEC countries which have some operations here. To the extent that they carry out banking operations here they are subject to the same rules as those applicable to our banks and to banks from EEC countries that are established here. They are subject, for all of their operations here, to the same supervisory control as that applied by the Central Bank to banks established here.