asked the Minister for Finance the sum by which the commercial bank lending in this country falls short of the previous guideline laid down; and the total sum indicated to be lent by the commercial banks during this year.
Ceisteanna—Questions. Oral Answers. - Commercial Bank Lending.
29.
The latest guideline issued by the Central Bank refers to the year ending April, 1972. That guideline provides for an increase in bank lending not exceeding £115 million which would allow for aggregate lending of up to £1,123 million by the end of that year. Up to mid-October lending amounted to £1,037 million which represented an increase to that date of £29 million. It is, however, too early yet to judge what the outcome for the full year will be. The demand for credit is expected to increase considerably in the period ahead. The measures which I announced in my recent statement to the House on the economic situation are designed to stimulate the economy and the effects should be seen in various ways including increased lending by the banks.
Are we to take it it is the Minister's view that for productive purposes the amount indicated up to April, 1972, should be lent by the commercial banks and that it should be used to prevent redundancies and to increase employment?
By and large that is so.
Can the Minister indicate why there has been a falling off in lending and while we are running below our target?
There are a number of reasons. However, as I have indicated, there is likely to be a quick catching up in the latter part of the year. One of the reasons is that it is thought a good deal of unauthorised borrowing took place during the bank strike and, for that reason, the amount of money now made available is not required by some people who had already got it.
Can the Minister state what proportion would be set aside for foreign investors who take over businesses here?
That does not relate to Question No. 29.
It involves the question of credit and that is covered in the question. I would ask the Minister in the event of this happening would he have information on it?
If it happened on a major scale I would have such information.
How can the Minister justify his reply to the effect that because of unauthorised borrowing during the bank strike money was not available? Surely unauthorised borrowing during the bank strike became apparent immediately the strike was over?
The Deputy may have misunderstood what I said; I said it was one of the reasons. One of the reasons advanced for the failure to take up the credit available to the extent expected was that some of the firms who might normally have taken it up had, in fact, borrowed in an unauthorised fashion during the bank strike.
Would the Minister say it political instability in general was a factor in the shortage of credit in the commercial banks? Had it any bearing on the matter?
I would say none at all since there is no political instability, as the Deputies opposite know only too well and to their relief.
Would the Minister not agree that the main reason people have not been borrowing up to the limit for investment purpose is because of the retrospective taxation imposed by the Minister in the autumn of 1970 and because they have no confidence in the future of industry due to the level of taxation?
I would not.