Now we come to a report of some practical implication, that is, a report on Draft Community Instruments dealing with Credit Institutions. Because this matter is of considerable interest to some of our credit institutions in this country I shall deal with it in detail. As Members can see, the proposal we are dealing with is a proposal for a Council Directive on the harmonisation of laws regarding the commencement and carrying-on of business of credit institutions. There is a related proposal for a Council Decision to set up a contact committee between the authorities of Member States responsible for the supervision of credit institutions. The important thing to note is that that contact committee will consist of representatives of the Central Banks which are the supervision institutions concerned.
The first point to note is that the Commission is proceeding very cautiously and warily in this whole area because it has discovered that it is a complex situation and that the institutions, the circumstances and the traditions of the different Member States are considerably different. There seems to be general agreement at all levels that the Commission should proceed slowly and cautiously in this harmonisation process. We have had very considerable help in our discussions as a Committee from the Irish Bankers' Federation, from the Building Societies' Association, from the Irish League of Credit Unions and from the Central Bank.
Paragraph 3 defines credit institutions, and as the proposals now stand the Directive will apply not only to banks but to trustee savings banks, building societies, credit unions as well as the Agricultural Credit Corporation and the Industrial Credit Company. In paragraph 4 we see what the Directive proposes, the prior authorisation by competent national authorities before an institution can commence, supervision by the competent authorities of the funds of these institutions, the supervision of withdrawal of authorisation, the application of the Directive to branches of institutions having their head offices outside the Community, appeal to the courts by the institutions, the establishment of the contact committee and also, an important point, that the implementation must be within a period of two years. The decision which is sought would establish the contact committee.
In paragraph 6 we set out our general attitude that we welcome, in general, the principle in the Directive with some limited reservations about the application of the Directive to institutions in this country. The bankers strongly favour a blanket coverage by the Directive. They feel that everybody who is in this field should be covered by the Directive. However, we do not quite accept that general view. First of all, let me say that we recommend—I shall skip over to paragraph 9 which contains perhaps our most important recommendation—that the credit unions, because of their particular constitution and framework and method of activity, be excluded from the operation of the Directive and we also ask that special consideration be given to Irish building societies.
