PUBLIC BANKING NETWORK WOULD REVITALISE OUR RURAL ECONOMY
Commenting on his question in the Dáil on setting up a public banking network, Deputy Willie Penrose said:
“I raised with the Minister for Rural and Regional Affairs the need to implement the commitment in the Programme for Government to investigate the establishment of a Public Banking Network in Ireland. Such banks exist in Germany and have been the backbone of funding SMEs. German public banks (called Spakasse) proved their worth during the great recession when unlike other banks they kept credit flowing to Enterprise and Job Creators.
“A number of positives of developing a Public Banking system In Ireland have already been identified:
- • It would be not for profit and be restricted to lending to the regional economy for its business
- • It would fill the gap left by the demise of the Building Societies and enterprises formerly served by the ACC
- • Both the Post Office and Credit Unions could earn additional income from selling Public Bank services across the counter in their branches
- • It would provide a suitable vehicle for European Investment Bank to lend funds to SMEs
“Although the greater Dublin area and multi-national export sectors have been growing, the Border Midlands West region has suffered from the withdrawal of banks and a slower recovery..
“I recall 30 years ago, the existence of many branches of Banks and Building Societies who played an important role in community development and life in general. Branches were staffed by people rooted in the community, who knew its strengths and weaknesses, knew the customers, their needs and concerns and had a stake in a vibrant local economy. With the demise of Building Societies and the withdrawal of bank branches the human intelligence and knowledge of business in the BMW region has been replaced with algorithms and remote banking with no interest or stake in the community.
“A dedicated Public Bank fills this void and would support enterprise and jobs in these regions. It would ensure a banking service committed to the local community, ensuring SMEs and the agricultural sector would have a dependable source of credit. Finally communities will benefit as the not for profit model will not only support enterprise and job creation but the surpluses for such a public banking model will be re-invested in worthy regional development projects.
“The latest update from the Minister to a Parliamentary Question I submitted is as follows:
“I can confirm that my officials have been provided with details of a proposal based on the Sparkassen model by Irish Rural Link, which has also presented its proposals to the Department of Finance.
Senior officials from my Department recently met with their counterparts in the Department of Finance and have agreed to develop a work programme to examine the potential of the Sparkassen model and other models of local public banking, as referenced in the Programme for a Partnership Government.
The officials will meet again in January and hope to be in a position to conclude their work around the middle of next year”.
“This is a timely initiative that will require considerable work and I am happy to learn from the Minister it will start in 2017