Dáil Éireann Debate, Tuesday - 16 April 2013
258. Deputy Pearse Doherty asked the Minister for Finance further to recent reports on the amount of exposure by German and British interests to the Irish banking system in 2008, his views on whether this exposure will be analogous to the amount of exposure by Russian interests to the Cypriot banking system, the bailout plan for which he has recently overseen, in 2013. [16369/13]
Amharc ar fhreagraThe Irish banking system and that of Cyprus are not comparable. In the case of Cyprus, we understand that substantial off shore interests and resources were deposited in domestic Cypriot banks by foreign parties. The size of the domestic banking system, at 7 times GDP, was large in relation to the real economy, while at the same time concentrating risks in particular areas and in specific banks. In contrast the Irish banking system attracted wholesale funding, from a diversified pool of investors (European, British, American and Rest of World) to support lending to the domestic economy to finance investment which was predominantly focused in Ireland (albeit some Irish banks had significant investments overseas).
In addition, overseas banks made substantial investments in Irish banking subsidiaries to gain exposure to the domestic economy and to extend credit to Irish businesses and households.
For these reasons, it is clear that the Irish banking system and Cypriot banking system are not comparable.
