FELIX O'REGAN,
Madam, - John McManus's column on the banking industry in Ireland (Business Opinion, December 9th) was not up to his usual standard of research, let alone fairness.
He lists 10 supposed reasons why the industry deserves to be levied to the tune of €100 million a year by the Minister for Finance. However, many of his reasons relate to areas that are in the control of parties other than the banks: for example, ECB interest rates, the Government's Special Savings Incentive Scheme, Central Bank regulation, the new IFSRA regulatory structure and the currency crisis of the early 1990s.
And when he does focus on specific banking matters, such as customer choice in the Irish mortgage market, he misses the fundamental point entirely. The reality is that Irish mortgage holders are paying among the lowest rates in Europe.
It is easy and populist to attack the banking industry. Here are 10 good reasons why the industry must remain strong and why an arbitrary and discriminatory levy is unfair and potentially damaging.
1. Over 36,000 people are today employed by banks and their subsidiary businesses in the Republic. That's 16,000, or 79 per cent, more than 10 years ago.
2. We already pay the best part of €900 million a year in PAYE, PRSI, VAT, Corporation Profits Tax and other taxes.
3. We spend an estimated €2.3 billion here at home per year. Some €1.2 billion of this goes on wages and related payments.
4. The combined contribution of the banking sector to the Irish economy accounts for over 3.5 per cent of GNP.
5. The importance today of banking to the Irish economy is reflected in the fact that, when total assets of credit institutions are taken as a percentage of GDP, Ireland ranks second highest in the EU after Luxembourg.
6. Some eight out of every 10 adults have a banking relationship and are served by us.
7. Independent research shows that nine out of every 10 Irish customers are satisfied with the service provided by their main bank (Source: MORI MRC MFS 2002).
8. Banks maintain some 900 branches/sub-offices throughout Ireland - almost exactly the same number as 10 years ago.
9. We facilitate over 180 million ATM transactions by customers each year - among the highest per capita usage in the EU.
10. The welfare of hundreds of thousands of individuals depends on the strength of our banking sector through investment on their behalf by domestic and foreign pension and insurance funds in bank shares; as does that of thousands of small shareholders who invest directly.
Finally, as to Mr McManus's point about "lack of competition" in banking, it is notable that the cover price of The Irish Times increased by the same amount (10 cent) and on the same day (October 7th last) as one of its main competitors, thus leaving all three domestic daily broadsheets at the same €1.40 cover price. He can be assured that, through a combination of competition and regulation, such an outcome in the banking sector would be very remote indeed. - Yours, etc.,
FELIX O'REGAN,
Communications Manager,
Irish Bankers' Federation,
Nassau Street
Dublin 2.