Fianna Fáil Table State-Backed Bank Motion

Fianna Fáil is to propose a new motion in the Dáil this week calling for the establishment of a new State-backed bank.

It is understood that the motion will call for:

• The establishment of a state-backed Enterprise Bank as a permanent solution to the significant lending gap in Irish banking;

• An examination of the competitiveness of the Irish banking sector and action to encourage non domestic banks to establish a retail presence in Ireland;

• Verification that the State-supported banks are meeting their lending targets

• Action to improve non-banking sources of funding for SMEs; and

• Improved regulation of moneylenders & measures to tackle illegal moneylenders.

Announcing the motion, Fianna Fáil Spokesperson on Finance Michael McGrath said: "The recent decision by Danske Bank and ACC to withdraw from the Irish market is another blow to hopes of real competition in the Irish banking sector. It’s extremely bad news for both business and personal banking customers in Ireland. Less banks means higher borrowing rates, increased charges and reduced rates for deposits.

"The long-term well-being of the Irish economy depends on effective competition and effective regulation of financial institutions. We need a full examination of the competitiveness of the banking sector in Ireland and a proper strategy for competition and regulation. Simply reacting to each development as it comes will not work. Just as the State seeks to attract foreign direct investment in other sectors, we also need a concerted effort to get international banks to establish retail and commercial operations here,” said Deputy McGrath.

Fianna Fáil Spokesperson on Jobs Dara Calleary added: "SMEs are the lifeblood of the economy representing 70% of all employment. But their recovery and their ability to create jobs is being strangled by a continued lack of credit.

"Fianna Fáil is proposing the establishment of a State backed enterprise bank as a permanent solution to the ongoing credit crisis. This was a commitment in the Programme for Government that has not been delivered. Our motion in the Dáil this week gives Fine Gael and Labour Deputies to honour that commitment to SMEs and help kick-start the economy."

(MH/IT)