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Independent Deputy Michael McNamara

Clare TDs tackle finance minister over exit of banks

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TWO Clare TDs have tackled the Finance Minister over the impending departure of two major banks from the Irish market. 

Both Ulster Bank and KBC Bank are to close Irish operations, prompting concerns for tens of thousands of customers, especially those who are older and less likely to be able to avail of online switching services. Addressing Minister Paschal Donohoe, Deputy Michael McNamara accused the Department of Finance of facilitating an “emerging duopoly” in the banking sector. 

“A local businessman said to me recently they [the banks] will do what they want and I had to correct him and say they are already doing what they want,” the Independent TD told a Dáil debate on policy and legislation.

“In theory, we have supervision from the Central Bank, but in reality those two banks have been allowed to do what they want, and it will hurt rural economies. It is already hurting them. The supervision from the Central Bank is supposed to prevent what has happened, but the banks have pulled out of many communities and continue to do so. There is no understanding of the communities or their economies in which the banks operate.”

The Scariff man was sharply critical of the regulatory climate. “Has the Governor of the Central Bank been in Ireland for the past three years?” he asked.

“Is there any link between the Central Bank and supervision of those banks? If not, they are bound to take advantage of the fact they now have an effective duopoly in Ireland. That is all brought about by the policy of the Minister’s Department. Is the Minister happy with the supervisory regime in place for the banks, given the emerging duopoly?”

In response, Minister Donohoe hit back, saying Deputy McNamara was already aware of the limitations of the power of the authorities to stop banks exiting the Irish market. “We cannot stop a bank leaving if it decides to leave,” he said.

“The Central Bank cannot do so and the Government cannot do so, and the Deputy knows that. Looking at the supervisory measures that are in place, a central bank cannot stop a bank if it decides it is going to close a branch, and I think Deputy McNamara is aware of that.”

Minister Donohoe said he was happy with the supervisory efforts of the Central Bank in recent years. “Proof of that is that, despite the many challenges we faced during the pandemic, this time around our banks were not part of the economic and financial difficulty we faced,” he said “In fact, they played a role in delivering solutions that were needed at a very difficult time, and I believe that.”

Deputy Joe Carey also asked Minister Donohoe what his department is doing to support customers of KBC and Ulster Bank. The Finance Minister acknowledged the exit of the banks is a “massive moment of change”. “It is going to be a challenge,” he said.

“Critically, in recent weeks the Central Bank has met all of the banks to emphasise to them the need for a resource to be in place to manage all of the accounts that will be changing across the coming weeks and months.

“I appreciate the Deputy raising this issue because it will be a huge moment of change later on in the year, and my message to all of the banks involved is that they need to have the staff and focus in place to make sure the transition is implemented as smoothly as possible for the sake of their customers.

About Fiona McGarry

Fiona McGarry joined The Clare Champion as a reporter after a four-year stint as producer of Morning Focus on Clare FM. Prior to that she worked for various radio, print and online titles, including Newstalk, Maximum Media and The Tuam Herald. Fiona’s media career began in her native Mayo when she joined Midwest Radio. She is the maker of a number of radio documentaries, funded by the Broadcasting Authority of Ireland (BAI). She has also availed of the Simon Cumbers Media Fund to report on development issues supported by Irish Aid in Haiti. She won a Justice Media Award for a short radio series on the work of Bedford Row Project, which supports prisoners and families in the Mid-West. Fiona also teaches on the Journalism programmes at NUI Galway. If you have a story and would like to get in touch with Fiona you can email her at fmcgarry@clarechampion.ie or telephone 065 6864146.

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