BANK GOVERNOR IN SLIGO
GOVERNOR PHILIP LANE AWARE OF RURAL SLIGO BANKING CLOSURES
LIKE a true economist, the new Governor of the Central Bank Philip Lane answers my questions on banking in Sligo in numerical point form.
He was visiting Summerhill College last Thursday to address the winning team of the Generation Euro competition who represented Ireland last May in the ECB Frankfurt.
Speaking to The Sligo Champion afterwards, Lane was first asked about Bank of Ireland’s decision to close the counter cash services at Ballymote, Tubbercurry and Manorhamilton.
Ulster Bank has closed its Ballymote branch altogether.
“Let me make three points. No.1, yes, we are very aware of this. The Central Bank has a procedural code that if a commercial bank does make one of these decisions, the way they close down, in terms of giving enough notice, making sure people’s accounts are moved in a proper way, making sure these closures happen in an orderly way - the Central Bank does insist on this and does keep an eye on that,” he said. His second point to make is that the recent withdrawal of banking services in rural Sligo are “commercial decisions.” The Central Bank cannot order a bank to keep these services open.
“This is reflecting the fact that more and more customers, and the banks will say this to you, strongly prefer digital banking. It’s not for everyone,” he said.
When it is put to him that older customers are most affected, Lane agrees that more needs to be done to bridge the digital divide.
“It’s so important that that digital divide is bridged so that public policy makes sure that whether it’s adequate access to the internet, to broadband and so on is part of it,” he said.
He added that the banks do have programmes to deal with older customers and phone banking.
“They do have some degree of alternative offerings. I would emphasise also that there are some banking services through the post office system.
“Now post offices are closing in some places as well so I think it reflects the fundamental reality of commercial banking. If you listened to their testimony in front of the Oireachtas a few weeks ago, the traffic in some of these branches was very low.
“This is a global phenomenon. We at the Central Bank are making sure, No.1, if a decision is made, it’s done properly. No.2 is at a wider public policy level, there’s a social imperative so that the digital divide doesn’t become such a barrier. No.3, is each person facing a situation should engage with their bank because most banks will have some kind of programme to deal with older customers. Unfortunately this kind of change is transforming the financial system,” he added.
Philip Lane is putting many new measures in place to hold banks to account now over the recent Tracker mortgage scandal.
Does he think this will be enough to address the moral vacuum that existed at the heart of such banking activities?
“The way we would phrase this is as a cultural issue,” said Lane.
“The culture of the banking system needs to put the customer first. Part of what we are doing and what we’ve committed to with the Minister is to issue a report on the culture of banking and that may lead to changes in policy.
“The issue is the banks have over many years shown a repeated lack of focus on the customer. Regardless of the shareholder issue, yes they are profit driven but it bites them in the end. The Tracker mortgages are biting them now in terms of cost,” he said.
He’s determined to bring in “credible enforcement” - “If they misbehave we go after them but it would be better if they didn’t misbehave.
“In order for them not to misbehave this cultural shift needs to happen,” he said.
Lane addressed the students about the work of the Central Bank and gave a presentation on what it might be like to work in banking.
“Our main message this morning is the Central Bank is a public service organisation. We are not a commercial bank. We’re working for the Government, for the State on behalf of the people.
“The banks need us too because we control the money and the fact that we control the money supply means the banks have to interact with us. We’re there to regulate the banks and we’re there to protect consumers,” he said.
Lane was impressed by the Summerhill students: “Summerhill has a very strong record. They’ve repeatedly done well in our Schools competition.”
Summerhil Alumni and Registrar of Credit Unions with the Central Bank Patrick Casey attended with the Governor.
“We fully recognise the strength of Sligo schools and we look forward to more working in the Central Bank in the future,” he said.
Summerhill Principal Paul Keogh said he was delighted to welcome Philip Lane to the college. “We have such a strong connection through the Generation Euro Awards Programme. We were runner’s up last year and winners this year. We’ve developed very strong links. We’re also very proud of the fact that Patrick Casey is a past-pupil of Summerhill. He’s the class of 1989 so it’s fantastic to welcome him back as well,” he said.
Students from the Mercy College attended the ceremony also.