The explanatory memorandum to the Bill explains that this section allows the Central Bank to be a member of or become a party to the establishment or operation of a payment system. I have no particular objection to this but I would be interested to know how it would be done.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."
This section provides that the Central Bank may become a member of or be a party to the establishment or operation of a payment system. The provision is necessary to supplement section 5 which provides that only credit institutions and financial institutions may participate in a payment system. The Central Bank is neither of these in a legal sense and a special provision is necessary to allow it to participate in a system.
Has some thought been given to how the Central Bank would become involved in the payment system?
As all payments are cleared on account through the Central Bank it would be impossible to operate a payment system without it.
Deputy Cullen and I were shown a clearing system some months ago and it was an eye opener to me. It is almost a factory production process dealing with mountains of paper.
Was that not a clearing house as distinct from a payment system?
Perhaps so. In the past, before the computer era, the bank would manually work out what banks owed each other. Is this now done under the auspices of the Central Bank?
This relates to section 5 which states that the bank may become a member of or a party to the establishment or operation of a payments system. The Deputy's points are valid but they relate to payments systems generally which was dealt with under section 5, the definitions section.
Does section 6 have implications for us with regard to European Monetary Union and the formation of the European Central Bank? Is there a possibility that our Central Bank would be subject to the European Central Bank?
It is not specifically related to that but it will by its very nature provide security for the distribution of the euro. That is not the main intent of it but it will embrace that also.
Question put and agreed to.
Sections 7 and 8 agreed to.