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Ulster Bank announced it is leaving the Irish banking market last month sparking calls that more competition is needed. Sam Boal

A new public banking system in Ireland? The Government is being asked to revisit the idea

Green Party and Fianna Fáil TDs are calling for the government to revisit the idea of community banking.

PUBLIC BANKS ARE the norm in Europe, so why not here? 

That is the question posed by the Green Party’s finance spokesperson Neasa Hourigan in  a new Green Party position paper on community banking.

There was extensive debate in the Dáil this week about the impact of the Bank of Ireland branch closures and what it means for rural Ireland, as well as the pulling out of Ulster Bank from the Irish market.

The Green Party says a review of under-served community access to banking services with a view to establishing a public banking system supported by credit unions and An Post is needed now. 

“The time has come for some action on public banking from the government,” said Hourigan. 

Public banking falls between the private commercial banking model and the credit union sector. These banks are regional and customer-focused rather than profit-focused. 

They would offer the same kinds of loans as commercial banks currently offer, but with more favourable terms.

Business loans would include leasing contracts and export financing. Mortgage customers could get a fixed rate for five, ten or 15 years.

Public banking

This argument for a public banking system has been made before. 

Under the 32nd Dáil, when Fine Gael were very much calling the shots, the issue was looked at, and ultimately dismissed.

However, with Fianna Fáil and the Greens in government, many TDs believe there is an appetite and the will to get a community banking system over the line. 

Hourigan has called on the Finance Minister Paschal Donohoe to set aside the 2019 Indecon report on Public Banking, calling for a new, fresh review of how credit unions and post office services could support a public banking system. 

The report was commissioned by government after a debate spanning two years took place about whether Ireland should roll out a public banking system.

In 2017, representatives from Germany’s Sparkasse public banking sector presented the model to Irish politicians in an Oireachtas Finance Committee.

They were told that is a local Sparkassen in every part of Germany, with 12,000 branches and 250,000 employees. It is the largest banking group – and therefore market leader – in Germany.

At the time, the proposal for Ireland, put forward by representatives from Sparkassen, as well as the non-profit organisation Irish Rural Link, was to have eight independent regional banks, which would feed back into a central service provider owned by these eight banks.

A pilot would be launched in the midlands.

In 2018, the matter was discussed by Cabinet, after Central Bank officials met with the above groups to hear about their proposal.

But nothing materialised.

Indecon report

In the end, the government commissioned the Indecon report, which reported back in 2019.

It found that there was no business case to be made to establish a public banking system in Ireland. 

The report said there was no economic case for a State-owned banking network, despite some areas of market failure.

It noted that there was an extensive offering to customers with credit unions, An Post, as well as a number of commercial banking providers in the market.

However, two years on, the Irish market landscape has changed somewhat. 

Calls for a fresh look 

It is not just the Greens looking for the Indecon report to be side-stepped. The matter was raised in the Fianna Fáil parliamentary party this week. 

TD John McGuinness told the Taoiseach that some government spokespeople were out defending the banks this week, and doing it “so strongly that the only thing they didn’t do was recommend a few bankers for sainthood.”

He called on Micheál Martin to set up a public banking system with An Post and the credit unions.

A number of TDs rounded on Finance Minister Paschal Donohoe in the Dáil this week, calling on the government to give customers more options when it comes to who they bank with. 

Independent TD Denis Naughten said Bank of Ireland branches in Elphin, Strokestown, Ballygar and Dunmore are about to close in his constituency, which is seen as “a significant blow to those communities”.

In some instances, Bank of Ireland does not even provide an ATM in the towns on a 24-7 basis, he added.

“I believe that the Government needs to urgently revisit the establishment of a State bank for SMEs and personal customers… A new State bank offering low interest rates without personal guarantees is now required to support both businesses and communities as they begin to reopen and emerge from this lockdown,” he said.

Fianna Fáil’s Marc MacSharry said in the Dáil on Wednesdy that it used to be Fine Gael policy and indeed a Fianna Fáil policy that Ireland would have a State bank, “that we would establish one with the needs of the people in mind, one with interest rates that are not extortionate”.

“However, we have not done that. Once people go into Government in this country we go native. We are told we cannot spook the markets. We are told we cannot spook the horses, we have to keep things stable,” said MacSharry.

He agreed with McGuinness that the country must move towards community banking.

“We no longer have mutuals in this country, there is no Irish Permanent Building Society, no Educational Building Society and no Irish Nationwide Building Society. Some may celebrate that fact but the reality is we only have what is driven by cold profitability.

“This week we see Bank of Ireland throwing its staff under the bus in the interests of technology. Ulster Bank did it before Bank of Ireland, as did AIB to an extent. Believe me, AIB is coming like a train to do the same, when it sees the reaction,” he said.

Limerick Fianna Fáil TD Willie O’Dea also rallied behind the idea, stating that community banking or some ”sort of realistic competition” is needed.

Vulture funds 

“One potential consequence is that the duopoly of AIB and Bank of Ireland, which controls, for example, 60% of the mortgage market will tighten its grip on that market. The result of the power they have over the mortgage market at present means this country is paying the highest mortgage rates in the civilised world. Any further diminution of competition arising from the departure of Ulster Bank will only further exacerbate that situation,” he said. 

He said another potential consequence is that NatWest, in order to release its capital from this country, may sell to a third party, commonly known as a vulture fund.

Giving a vivid account of one such vulture fund, O’Dea said:

“I notice one particular vulture, Cerberus Capital Management, is reportedly circling ominously at present. It is very appropriately named because in Greek mythology, Cerberus was the monstrous creature that guarded the gates of hell and prevented its inmates from escaping.

“It was supposed to have had three dog’s heads, snakes growing from its body and a serpent’s tail. The vulture funds, including the latter-day Cerberus, have a long and distinguished record of consigning people to a living hell from which they could never hope to escape.”

O’Dea said he had been listening to the finance minister tell the Dáil what powers he has and does not have.

“Whatever about the powers he has or does not have, he certainly has a duty and a responsibility to do all in his power to ensure the small businesses and homeowners of the country do not fall into the clutches of such a rapacious monster or any others of its ilk.”

With such colourful contributions being made to the minister in the Dáil this week, there is no doubt that pressure is ratcheting up on Donohoe, and indeed the Taoiseach, to shake up the Irish banking system. 

But will they?

One Fianna Fáil source said significant pressure needed to be piled on the powers that be to make it a runner in Ireland, stating that currently, it is about one thing, and one thing only: “It’s about protecting the duopoly.”

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32 Comments
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    Mute KM TON
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    Dec 1st 2016, 1:14 PM

    I feel bad for people losing their jobs but this is the least surprising news ever. The only bit i of a surprise is that it lasted this long.

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    Mute Veroníca
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    Dec 1st 2016, 5:58 PM

    I’m surprised like you that it survived this length of time considering it was utter rubbish anyway

    11
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    Mute Alex Simms
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    Dec 1st 2016, 2:16 PM

    And so concludes the worst idea in Irish television history…

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    Mute Neal, not Neil.
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    Dec 1st 2016, 5:34 PM

    You forgot about Channel 6.

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    Mute Dave O'Hanlon
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    Dec 1st 2016, 6:28 PM

    Channel 6 was actually a decent idea, a channel aimed primarily at a young adult audience. The problem was when it got taken over by TV3 and turned into 3e. They could easily have kept it the way it was but no instead of looking at Michelle Doherty showing decent music videos there was yet more Ant & Dec with X factor loonies

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    Mute Irish Cottage Rental
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    Dec 1st 2016, 1:33 PM

    One island two UTV’s
    A endless farce.

    139
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    Mute Carm(Orange Vampire)
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    Dec 1st 2016, 2:33 PM

    Does this mean that the real ITV/Ulster TV will be available to Irish viewers again?

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    Mute David Walsh
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    Dec 1st 2016, 2:51 PM

    @Carm(Orange Vampire): There’s no legal obligation on TV carriers in Ireland to carry any of the ITV franchises so it’s probably not going to happen. In any case the ITV shows licenced to the TV3 group would be liable to geo locking; that would make it as good as a non option to carry UTV/ITV here so all you’d get is Julian or Good Evening Ulster. Certainly Virgin Media would have no incentive to carry it, they being its opposition.

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    Mute Seán J. Troy
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    Dec 1st 2016, 4:23 PM

    @David Walsh: Didn’t the EU just pass a bill that ends geoblocking within the EU?

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    Mute John Flood
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    Dec 1st 2016, 4:26 PM

    Julian on camera is no longer on the air. He does prerecorded voice overs controlled by ITV HQ. Changed a couple of weeks ago.

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    Mute Screaming Toddy
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    Dec 1st 2016, 4:56 PM

    UTV will never be on Virgin again. Why would Virgin have a competitor showing the same rubbish stuff on their rubbish channels

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    Mute David Walsh
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    Dec 1st 2016, 11:45 PM

    @Seán J. Troy:

    1) It is only a draft resolution and not a law as of yet
    2) It excludes copyright protected services; this included media and broadcasting.
    3) UK will soon be outside of the EU and not regulated by EU laws.

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    Mute Gavin Redmond
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    Dec 1st 2016, 1:21 PM

    Created to fail. Somethings just don’t work.

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    Mute Owen Hennelly
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    Dec 1st 2016, 1:45 PM

    So will it stay on as a third TV3 channel or be wound up altogether? If it’s wound up will we be getting UTV NI back in its place?

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    Mute Paul Furey
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    Dec 1st 2016, 3:58 PM

    UTVNITV3

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    Mute Seán J. Troy
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    Dec 1st 2016, 4:23 PM

    @Paul Furey: I heard of that one, it’s a an African rebel group.

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    Mute Neal, not Neil.
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    Dec 1st 2016, 5:29 PM

    @,Seán the geoblocking thing was more about making sure that your can access your Irish Netflix or Sky on demand content while temporarily visiting another EU country

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    Mute Larry Doyle
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    Dec 1st 2016, 1:54 PM

    Great – even more Jeremy Kyle repeats!

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    Mute Tom Harpur
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    Dec 1st 2016, 2:54 PM

    A few years back TV3 had plans to start 3 classics 3 kids 3 sports and TV3+1 and a Sony HD Studio they commenced the Studios but scrapped the extra channels so maybe now they’ll rebrand UTV to 3 Classics or 3 sports.

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    Mute Neal, not Neil.
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    Dec 1st 2016, 5:31 PM

    It would be very interesting to see what a TV3 “cassic” is. Perhaps a selection of Vincent Brown’s crankiest episodes?

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    Mute John Flanagan
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    Dec 1st 2016, 3:33 PM

    UTV Ireland didn’t serve the deaf & hard of hearing community well because when it was first launched, there were no subtitles to be had at the time. Glad to see this god-awful channel go because of endless repeats as well!

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    Mute Screaming Toddy
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    Dec 1st 2016, 4:57 PM

    What?

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    Mute Scot Tanner Buchholz
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    Dec 1st 2016, 11:38 PM

    That is not the fault of the TV station rather a fault in Ireland not having ‘CC’ services like they have in Canada and the U.S.A. CC = closed captioning. The technology is out there. Ireland just lags behind in using it.

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    Mute Mick Mccomiskey
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    Dec 1st 2016, 2:53 PM

    This is very disappointing. Now I won’t be able to use utv Ireland player. It had most of the stuff available on itv.

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    Mute Neal, not Neil.
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    Dec 1st 2016, 5:33 PM

    TV3 own a lot of those programmes rights for the next ten years as part of the deal so they’ll put them somewhere.

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    Mute Mike Galvin
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    Dec 1st 2016, 6:14 PM

    All I say is I wish TV3 the best of luck with the 3 channels, whatever we might say. I only wish they would upgrade their picture quality on saorview especially for large screen tvs, the same applies to TG4.

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    Mute John Flood
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    Dec 1st 2016, 4:28 PM

    If you want UTV, get FREEVIEW Ireland via satellite. Best thing going. Pay for set up or DIY and NO fees afterward.

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    Mute Shane Kinsella
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    Dec 1st 2016, 4:44 PM

    You’re getting mixed up with FREESAT. Freevirw is the terrestrial TV service. Both of which are miles better than saorview.

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    Mute John Flood
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    Dec 1st 2016, 4:47 PM

    both Saorview and Freeview into a single Digital Terrestrial Receiver allowing you to receive all the Free UK & Irish Digital TV Channels on a single box.

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    Mute Dónal O'Flynn
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    Dec 1st 2016, 8:32 PM

    @John Flood: you’re still missing Shane’s point. You can’t get “Freeview” here that’s only available within the bounds of the UK. What we can get is “Freesat”. The only reason we have it at all is that the satellites have to cover all of the UK and can’t do that without also covering Ireland.

    Also available for the few percent of Irish homes that can’t get “Saorview” is “Saorsat” with RTÉ 1, RTÉ 2 and TG4 only, no purely commercial telly.

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    Mute John Flood
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    Dec 1st 2016, 8:41 PM

    I just cut n pasted text from my owners manual. Apparently not all of Ireland can receive the FTA channels of the satellite. I’m in Wicklow, my friend in Cork can’t get same.

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    Mute David Walsh
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    Dec 1st 2016, 11:49 PM

    @Dónal O’Flynn: there are plans on the cards to make most of the Freeview channels available to Saorview customers.

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    Mute Ciarán Masterson
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    Dec 2nd 2016, 1:27 AM
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    Mute Paddy Flynn
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    Dec 1st 2016, 3:08 PM

    TV3 2? I don’t think so.

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    Mute Tiarnan Guinée
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    Dec 1st 2016, 3:49 PM

    @Paddy Flynn: 3ee more like

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    Mute Scot Tanner Buchholz
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    Dec 1st 2016, 11:33 PM

    This is a sad day for freedom of the press, steps towards democracy and the people who will loose their jobs. Ireland is large enough to support Three tv stations. Rte should loose RTE2 and save tax payers money. #SadDay #UTVIreland

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    Mute von
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    Dec 1st 2016, 7:51 PM

    From TV 3 Ah well we can get rid of all the people who kept us alive for months but now we have Emmerdale and Corrie dory guys we don’t meed you. Bye bye.
    And the fat cats get fatter.

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    Mute Buster VL
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    Dec 1st 2016, 8:24 PM

    Aaa Wally free zone.

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