Vol. 536 No. 4
29 Mr. O'Shea asked the Minister for Finance the response his Department has received to the letter written to the Irish Bankers Federation sug gesting that it draw up a code on branch closure to ensure continued access for those affected by bank closures; the role the new Irish Financial Services Regulatory Authority will play in monitoring the closure of bank branches; and if he will make a statement on the matter. [14237/01]
First, I might clarify the record by stating that my Department did not write to the Irish Bankers' Federation about drawing up a code of practice on bank closures. I had initially signalled my concerns about branch closures to the IBF at a meeting last November. The matter was raised subsequently with the IBF by officials from my Department at a meeting on 21 February last which, inter alia, discussed the question of a code of practice.
Since then, the IBF has written to me to say that it is looking into the issue of developing a code of practice to cover bank or customer communication around the issue of branch restructuring.
I have no statutory function in regard to decisions relating to the location or size of bank branch networks. Such matters are the prerogative of the credit institutions themselves and they must be free to make decisions on the maintenance, closure or opening of branches on the basis of their own commercial criteria.
At the same time, I can and do appreciate the concerns that arise at local level when branch closures are proposed. While banks cannot be forced to maintain branches in particular locations regardless of commercial realities, I also acknowledge the public's legitimate concerns about such closures. Any such restructuring should be done in a sensible and intelligent manner and should also be done in partnership with customers.
In this context I welcome proposals by the IBF to develop a code of practice on branch restructuring and officials from my Department will be happy to assist the IBF in this regard if required.
With regard to a possible role for the Irish Financial Services Regulatory Authority in relation to this matter, as I have previously advised the House, a report on strategic issues facing the banking sector was published by my Department in August 2000. It examined this issue and recommended that,
The banking industry needs to develop a strategy, whether involving agency arrangements with other non-bank retail outlets, electronic arrangements or otherwise, to address the issues of maintaining appropriate mechanisms for and levels of access, in all regions and by the different social groups, to bank services in the context of possible future developments such as internet banking, closure of branches and rationalisation in the branch banking system. The regulatory authority for the financial services sector should monitor and report on this from a customer perspective.
