The Minister for Finance has told the Dáil that he will oversee “a broad-ranging review” of the banking sector.
Paschal Donohoe said the review will consider “possible gaps in terms of competition and consumer choice”, “assess the availability of credit to SMEs … and consider options to further develop the mortgage market.”
It wil also examine the “increasing role of credit unions and An Post in the provision of banking services,” he said.
Mr Donohue also confirmed that he intends to sell “part of the State’s 13.9% directed shareholding in Bank of Ireland”, and do so “by way of a trading plan which is an effective, cost efficient method”.
He could say no more, he added, “as it would be detrimental to maximising value for the taxpayer”.
Labour Party finance spokesperson Ged Nash said that the State’s interest in banking should extend beyond selling off shares.
He welcomed the minister’s announcement that a review of the sector will take place.
Deputy Nash said that he wants to know “the nuts and bolts around how that might proceed”, including timelines, and warned that Ireland is “careering down the path of an effective quasi-monopoly”.
Fianna Fáil’s Dara Calleary said that the “absolutely appalling” tracker mortgage controversy had “eroded trust” in banks, perhaps even more than the economic crash had.
He said that when banks decide to pull out of a locality “they turn their backs on communities” – in some cases closing the last branch in an entire region.
People are then forced to engage in “confidential” banking transactions in the local supermarket, if that is where the post office is located, Deputy Calleary said.
Social Democrats co-leader Róisín Shortall said Ireland is being left “hostage to the big banks”.
“A third of bank branches in Ireland have closed or will close over a seven-year period,” she said.
Ms Shortall called for the establishment of a “second tier” of “community banking” between “the level of the credit unions and the three big banks”.
This could be modelled on the Sparkassen system in Germany, whose practitiioners are eager to share their expertise with Ireland, she said.
Before the summer recess, Mr Donohue hopes to publish the heads of a bill which, he said, would introduce “a senior executive accountability regime” and “place obligations on firms and the senior individuals within them to set out clearly where responsibility and decision making lies.”
This will help to encourage a “cultural change in the banking sector and throughout the financial services industry”, the minister said.