Michael Healy-Rae
Ceist:211. Deputy Michael Healy-Rae asked the Minister for Finance if he will address matters (details supplied) with regard to the banking system; and if he will make a statement on the matter. [16615/17]
Amharc ar fhreagraBanking Sector
Ceisteanna (211, 212)
Michael Healy-Rae
Ceist:212. Deputy Michael Healy-Rae asked the Minister for Finance if he will address an issue with regard to a group (details supplied); and if he will make a statement on the matter. [16616/17]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 211 and 212 together.
The Government has not ruled out introducing a Community/Public Banking model. The Programme for Government commits the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs to thoroughly investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions. It also calls for the investigation of a new model of community banking that could provide a suite of banking services through the Post Office Network, such as the Kiwibank model in New Zealand, where the Post Office-owned bank provides a comprehensive suite of financial services, from personal loans and bank accounts to credit cards, business banking, and insurance.
The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs have undertaken a period of consultation on this matter. The consultation closed on 29 March.
The Department of Finance is working closely with the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs on this matter, and has attended a number of meetings with interested parties, on the request of the lead Department. One of these meetings was with the Public Banking Forum of Ireland.
The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs, assisted by the Department of Finance, will be producing a report for both the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs and the Minister for Finance setting out their conclusions on the investigation into Local Public Banks. This report is expected to be completed by the end of May 2017.
Banking Sector
Ceisteanna (213)
Michael Healy-Rae
Ceist:213. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) with regard to privately owned commercial banks; and if he will make a statement on the matter. [16618/17]
Amharc ar fhreagraFreagraí scríofa
I would not agree that the commercial banks enjoy a monopoly on what I understand you refer to as "credit creation". One of the roles of credit unions for example is the creation of sources of credit for the mutual benefit of its members at a fair and reasonable rate of interest.
Within the Credit Union sector, total lending has contracted since 2011 with total sector loans (before provisions) falling from €5.7bn in 2011 to €4.1bn in 2016. Total sector loans (net of provisions) have fallen from €5bn to €3.6bn over the same period. The average sectorial Gross Loan to Asset (LTA) ratio has fallen from just over 40 per cent in 2011 to 27 per cent in 2016. This is in the context where total loans to Irish households (consumer credit) have contracted from €17bn in 2011 to €12bn in 2016. Credit unions have maintained a circa 34 per cent share of this type of lending during the period 2011 to 2016.
Lending restrictions on specific credit unions are imposed in the context of on-going matters of supervisory concern arising in individual credit unions. Currently circa 24% of Credit Unions are operating under lending restrictions. For those credit unions where there is an individual loan size restriction in place, the level at which the limit is imposed ensures that the vast majority of those credit unions can continue to make loans significantly more than the average loan for the sector of just above €6,000.
Under the terms of the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016, an individual member savings limit of €100,000 applies. The Regulations also provide that credit unions could apply to the Central Bank to retain individual members' savings in excess of €100,000, which were held at commencement of the Regulations and that individual credit unions with total assets in excess of €100m could apply to the Central Bank for approval to increase individual member savings in excess of €100,000.
In recognition of the important role of credit unions as a volunteer co-operative movement in this country and my support for a strengthened and growing credit union movement, the Central Bank has agreed to an accelerated review of the savings limit.
In relation to the assertion that some banks have 'monopoly control over the payments system', the Central Bank has sole responsibility for the domestic retail paper-based clearing system, but is not the primary overseer for the pan-European/external systems used for electronic payments and card payments, and for securities settlements. In addition, Banking & Payments Federation Ireland is the strategic, representative, administrative and payments system integrity body for the payments industry in Ireland.
Betting Regulations
Ceisteanna (214)
Niall Collins
Ceist:214. Deputy Niall Collins asked the Minister for Finance the amount of revenue received in 2016 from the betting levy; the portion of this revenue that was from online bets and physical bets respectively; and if he will make a statement on the matter. [16622/17]
Amharc ar fhreagraFreagraí scríofa
I am informed by Revenue that the 2016 receipts from Traditional Betting (instore), Remote Betting (online) and Betting Intermediary Duty on Commissions are as follows.
|
Traditional Betting |
Remote Betting |
Betting Intermediary Commissions |
Total |
|
|
€m |
€m |
€m |
€m |
|
|
2016 (Prov.) |
28.1 |
20.7 |
1.9 |
50.7 |
It should be noted that these receipts are provisional in nature and may be subject to revision. Annual statistics from Betting Duty are published on the Revenue statistics page at the following link: www.revenue.ie/en/about/statistics/betting-duty-receipts.html.
Tender Process
Ceisteanna (215)
Richard Boyd Barrett
Ceist:215. Deputy Richard Boyd Barrett asked the Minister for Finance the amount groups (details supplied) will each be paid for assistance in the flotation of a bank; when and the way the tenders were advertised for these contracts; and the details of any meetings he had with these groups or representatives of these groups in the past year. [16665/17]
Amharc ar fhreagraFreagraí scríofa
In December 2016, I announced that three firms were appointed to act as joint global co-ordinators to lead a selling syndicate in preparation for a possible AIB IPO. On the 23rd of March this year I further announced the addition of five joint bookrunners and a co-lead manager to the syndicate. These syndicate banks have been appointed until July 2018.
The syndicate was appointed following two separate competitive mini-competitions involving the members of Lot 3 of the Department s Capital Markets Distribution panel. My Department appointed Rothschild as Independent Financial Advisor in December 2015, this appointment was made on foot of a tender competition launched in late November 2015, involving all of the members of Lot 1 of the Department's financial advisory panel.
Our Financial Advisory panels were constituted following an open procurement procedure in 2014. Further information on our Financial Advisory procurement panels can be found here: www.finance.gov.ie/news-centre/press-releases/advisory-panels-financial-matters
Earlier this year, my Department appointed, following a competitive procurement process in line with European standards and advertised on the e-Tender platform, Gordon MRM and London-based Citigate Dewe Rogerson consortium to act as public relations advisers as part of the preparation for a possible IPO. This contract is for an 18-month period.
The Deputy should be aware that in line with the State agreements with AIB, that all fees incurred by the State in relation to any capital transaction will be paid by the bank.
Fees are only payable to the syndicate on the completion of a successful transaction, and are proportional to the value of the transaction. As such it is not possible to provide the exact quantum of fees that would be paid as no transaction has occurred. The fees that have been negotiated by my officials are very competitive by reference to comparable transactions. The number of syndicate banks appointed is also within precedent and does not affect the overall fee level payable.
In addition to the syndicate banks, fees will be payable to legal and communications advisors, as well as our independent financial advisor. As described, these fees will be recoupable from AIB. Details of the fees paid to these parties are disclosed under the procurement section of the Department's website:www.finance.gov.ie/publications/foi-publication-scheme/procurement/procurement
I met with representatives of the three global coordinator banks (Deutsche Bank, Bank of America Merrill Lynch and Davy) on the 9th of January this year, following their appointment to the syndicate. Representatives of Rothschild, our independent financial advisor, and Department officials also attended this meeting.
During the last year I have separately met with representatives of JP Morgan (24/01/2017) and Deutsche Bank (10/11/2016 & 05/09/2016).
Brexit Issues
Ceisteanna (216)
Noel Rock
Ceist:216. Deputy Noel Rock asked the Minister for Finance if he is committed to a non-negotiable €58 billion Brexit bill; his views on whether that sum is up for negotiation; and if he will make a statement on the matter. [16690/17]
Amharc ar fhreagraFreagraí scríofa
The financial settlement between the EU and the UK will be part of the Article 50 negotiations. As a member of the EU 27, Ireland stands ready to engage in fair and constructive engagements on this issue. It would not be helpful to speculate on any amounts at this point.
Brexit Issues
Ceisteanna (217)
Noel Rock
Ceist:217. Deputy Noel Rock asked the Minister for Finance the steps which need to be taken to ensure that Dublin, not other European cities such as Paris, becomes the new financial services capital of Europe following Brexit; and if he will make a statement on the matter. [16691/17]
Amharc ar fhreagraFreagraí scríofa
In addition to the challenges posed to Ireland by the withdrawal of the UK from the EU, the Government recognises that there will also be opportunities for Ireland arising from Brexit. The Government is keen to maximise those opportunities where possible. In that regard, international financial services (IFS) has been identified as an area of potential opportunity arising from Brexit in relation to the movement of business from existing UK locations in addition to other businesses seeking a new EU location post-Brexit.
Ireland has a successful track record of competing for, and winning, global foreign direct investment. One of the key pillars of that success is the growth of the IFS sector, in particular over the past 30 years. The continued successful development of the financial services sector in Ireland is a priority for the Government.
In general terms, the Government will continue, through IDA Ireland, to promote the attractiveness of Ireland as a location of choice for financial service firms that are considering moving out of London or those firms not currently based in Europe who are considering a move into the EU after a UK Brexit. Both Enterprise Ireland and IDA Ireland are in close contact with their clients on the challenges and opportunities that Brexit presents. We will, for example, continue to implement our clear strategy for driving growth in the financial services sector and we will maximise any opportunities that might arise.
This Strategy, which is known as IFS2020 Strategy, is a whole-of-Government approach to further driving the growth and development of the IFS sector in Ireland. IFS2020 represents a clear and coherent plan for driving further growth in the IFS sector. The Strategy, led by a specifically appointed Minister for Financial Services, Eoghan Murphy, is supported by all relevant public and private sector stakeholders. We will continue to leverage the IFS2020 Strategy as we seek to maximise opportunities that arise and drive growth in the IFS sector in the context of Brexit.
We have a very strong offering and we've done extensive work to promote that offering. Global competition for foreign investment has never been more intense. We are aware that not every decision will go our way. There will be an ebb and flow to this, and the flow to Ireland will be strong from decisions that have already been made in our favour. But other cities in Europe will also be chosen by companies looking to maintain access to the Single Market, as well as cities in Ireland such as Dublin and regional centres such as Cork and Limerick, to name a few. However, the fundamentals that attract companies to Ireland remain strong and with our proven talent and track record as a location of choice for international financial services continue to attract interest.
Mortgage Repayments
Ceisteanna (218, 222, 223)
Bernard Durkan
Ceist:218. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the lending institutions are expected to accommodate by way of extension of mortgage repayment period for borrowers in arrears in respect of their family homes, having particular regard to that fact that all borrowers and all taxpayers have had to contribute to the bailout of the lending institutions; and if he will make a statement on the matter. [16737/17]
Amharc ar fhreagraBernard Durkan
Ceist:222. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he has received communication from the lending institutions with a view to identifying the degree to which family home repossessions are likely to occur throughout the remainder of 2017; if he has in mind particular intentions to lessen the degree to which homelessness can occur as a result; and if he will make a statement on the matter. [16741/17]
Amharc ar fhreagraBernard Durkan
Ceist:223. Deputy Bernard J. Durkan asked the Minister for Finance his views on whether a new statutory code of conduct be operated by lenders and borrowers in situations in which the family home is under threat of repossession; his further views on the need to encourage the financial institutions to provide adequate recognition and protection in situations in which the borrowers have continued to meet monthly repayments to the best of their ability; and if he will make a statement on the matter. [16742/17]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 218, 222 and 223 together.
I am informed by the Central Bank that within the remit of it's responsibilities for safeguarding stability and protecting consumers, its approach to mortgage arrears resolution is focussed on ensuring the fair treatment of borrowers and ensuring that lenders have appropriate arrears resolution strategies and operations in place. The Deputy will be aware that the Code of Conduct on Mortgage Arrears forms part of the Central Bank's Consumer Protection Framework. It is a statutory code and it provides a strong consumer protection framework, aimed specifically at the process to be followed by relevant firms, to ensure borrowers in arrears or pre-arrears in respect of a mortgage loan secured on a primary residence are treated in a timely, transparent and fair manner.
The overriding objective of the CCMA is to ensure the fair and transparent treatment of consumers in mortgage arrears or pre-arrears, and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow. Each regulated entity must consider the borrower's situation in the context of the solutions they provide, which may differ from firm to firm. The CCMA does not prescribe the solution which must be offered. At the end of the mortgage arrears resolution process (MARP), regulated entities are required to provide a three-month notice period to allow co-operating borrowers time to consider their options before legal action can commence. The CCMA includes requirements that arrangements be sustainable and based on a full assessment of the individual circumstances of the borrower and that repossession be used only as a last resort.
As regards potential court proceedings, the Deputy should note that under the CCMA, a regulated entity may only commence legal proceedings for repossession where it has made every reasonable effort to agree an alternative repayment arrangement (ARA) with the borrowers and other clear requirements are met or the borrower has been classified as not co-operating. This framework requires lenders to exhaust the options available from the suite of ARAs offered before taking action which may result in the borrower losing their home (whether by voluntary sale or repossession). During the legal process, borrowers have opportunities to re-engage with lenders to find a solution.
In conclusion, I would refer the Deputy to the Central Bank's Mortgage Arrears Report, published on my Department's website at www.finance.gov.ie/what-we-do/banking-financial-services/publications/reports-research/report-mortgage-arrears-2016, in which the Central Bank stated that 'Overall, there is strong evidence that banks and non-banks are looking to exhaust available options before moving into the legal process'. The Deputy will be aware of the Abhaile scheme, launched by the Tánaiste and Minister for Justice & Equality and the Minister for Social Protection, which offers indebted borrowers access to State-funded legal and/or financial advice to help them identify how best to address their mortgage arrears, including considering if a personal insolvency arrangement would suit their circumstances. I understand that there is strong take-up of this scheme by borrowers. It is clear that where borrowers actively engage with their lender and seek advice they are more likely to find a solution that will enable them to remain in their home.
Economic Competitiveness
Ceisteanna (219, 225)
Bernard Durkan
Ceist:219. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that Ireland remains a competitive economy and attractive to indigenous investors and foreign direct investors; and if he will make a statement on the matter. [16738/17]
Amharc ar fhreagraBernard Durkan
Ceist:225. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects this economy to maintain positive performance over the next four years; if he anticipates any corrective measures arising from external factors; and if he will make a statement on the matter. [16744/17]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 219 and 225 together.
In general, recent indicators have been very positive, indicating that the economic recovery is continuing at a robust pace. The preliminary estimate for full-year GDP growth in 2016 is 5.2 per cent based on National Accounts data for the fourth quarter of the year.
Importantly, domestic demand made a strong positive contribution to growth in 2016 with consumption increasing by 3.0 per cent in 2016. This is crucial as domestic sectors are both jobs-rich and tax-rich. What's more, the exporting sector appears to be holding up reasonably well despite the weakness in sterling.
An important factor in strong export performance is competitiveness. In this regard, significant progress has been made in recent years. The latest figures from the Central Bank of Ireland, show that Ireland's real harmonised competitiveness indicator (a widely used measure of competitiveness in Europe) has improved by over 20 per cent between its peak in 2008 and February 2017.
The gains in Irish competitiveness achieved since 2008 have been hard-won through productivity improvements and wage and price moderation. It is important that this competitiveness is preserved and continues to support growth. This is all the more important given the several sources of uncertainty which could negatively impact on the economic outlook. In particular, the UK's decision to leave the EU has added to concerns about the international outlook while the change in policy direction by the new US administration has also added to concerns about the international economy. Weaker than expected trading partner growth would negatively impact on Irish growth through reduced exports.
In summary, I am confident that significant economic progress can be made in the years ahead. However, this is critically contingent upon implementing appropriate polices and that is what the Government intends to do.
Question No. 220 answered with Question No. 210.
House Prices
Ceisteanna (221)
Bernard Durkan
Ceist:221. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he monitors house and property prices with a view to preventing inflation in the sector; and if he will make a statement on the matter. [16740/17]
Amharc ar fhreagraFreagraí scríofa
While housing policy is primarily the responsibility of the Minister for Housing, Planning, Community and Local Government, my Department continues to monitor developments in the wider property market, including trends in house prices, on an ongoing basis as these issues can have spillover effects to the rest of the economy.
As part of the Rebuilding Ireland, Action Plan for Housing and Homelessness, the Government has set out a comprehensive package of 113 actionable measures designed to address the ongoing structural constraints within the construction sector and restore the housing market to a sustainable equilibrium. The implementation of these actions is monitored on an ongoing basis and reported publicly through quarterly progress reports.
According to the Central Statistics Office's Residential Property Price Index, national property prices increased by 0.6 per cent between December and January and by 7.9 per cent on an annual basis. At the regional level, residential property prices in the 12 months to January 2017 increased by 5.3 per cent in Dublin and by 11.3 outside of Dublin. Relative to peak, prices in Dublin are 32.4 per cent lower with those outside Dublin some 36.6 per cent lower.