Denis Naughten TD has called for the establishment of a cross party Dáil Committee which, supported by the State, would design and builds on the key elements of a third banking force.
Addressing a series of meetings following the planned closure of Bank of Ireland branches across provincial Ireland, Denis Naughten said: “We have two distinct customer bases that are being excluded by the current two bank model in this country, namely personal customers and small businesses. Both elements need to be addressed in a new banking model.
“With 13% of people not using online banking, a figure that is even higher across regional Ireland, even a simple service such as the provision of 24 hour access to an ATM for both lodgements and withdrawals in these rural towns would make a big difference in helping these towns recover after Covid.
“Prior to Covid these towns were beginning to reinvent themselves, particularly with the opportunity of Government funding through tourism, rural regeneration and town and village schemes. The decision by Bank of Ireland is a significant setback to their plans.”
Denis Naughten added: “Unless this agenda is politically driven on a cross party basis, then I believe it is doomed to failure because the reality is that the financial establishment, in all its guises, does not want a third State co-ordinated banking force that will actively compete with the two existing banks.
“There is no doubt that there is an absolute mindset block against State involvement in the banking sector. Surely if Covid has taught us anything it is that when it is needed ways can be found for State intervention in the long-term public interest?
“The basic independent banking infrastructure already exists but it remains fragmented and instead of a copy and paste a model from some other country we should start with our credit unions, post offices and the two State banks, Strategic Banking Corporation of Ireland and Microfinance Ireland.”
Denis Naughten pointed out that the key elements to service these markets already exist.
“Firstly, there is a comprehensive branch network available through our post offices and credit unions to service personal customers. The Department of Finance published a report on the Evaluation of Concept of Community Banking in Ireland by Indecon Consultants, which showed that An Post has in excess of 500 post offices in locations where there are no banks within 5 kms and that was before the Bank of Ireland planned closures,” he explained.
“Secondly, we already have State banks in Strategic Banking Corporation of Ireland and Microfinance Ireland which have been specifically designed to provide flexible finance to small and medium sized businesses.
“So rather than trying to reinvent the wheel, we need to build on these key strengths and design an economic strategy for rebuilding our economy through our local businesses which are so important to recovery outside our cities.
“Before the pandemic 250,000 SMEs accounted for 99.8% of total enterprises and 65% of total employees. SMEs are the backbone of the country and it is vital that they get up and running again but they will need supports. They have been the backbone of communities across the country and can be once again, with the right backing.
“We also need to see a far more competitive mortgage market and we also need to have access to cheap green finance for homeowners and landlords to make existing homes far more energy efficient,” concluded Denis Naughten.