Dáil Éireann Debate, Thursday - 20 February 2014
20. Deputy Mick Wallace asked the Minister for Finance his views on comments by the Central Bank Governor that banks may no longer have the technological capacity to engage in small and medium enterprise lending; and if he will make a statement on the matter. [2959/14]
Amharc ar fhreagraI assume the Deputy is referring to the comments attributed to the Governor of the Central Bank in the article contained in the "Irish Times" on 14 January last, entitled "Have the Banks Forgotten How to Lend?" These comments were not contained in the Governor's speech, which is published on the Central Bank website. I do not intend to comment specifically on unsubstantiated quotes attributed to third parties in newspapers.
However, on a more general note, the Credit Reviewer remarked in his seventh quarterly report in February 2012 that:
"overly rigid lending policies were a source of concern and this remains the case. I continue to see too many cases where the fundamental and common sense question of whether the bank will get its money repaid is being crowded out by adherence to overly rigid lending policies and procedures."
Since then, in the course of ongoing engagements between my Department and the banks, I am informed that specialist internal training has taken place in order for staff to deal with distressed SMEs as well as developing staff skills in relation to cashflow lending. I understand that the Institute of Bankers have held courses to assist bank staff in assessing the viability of SMEs when making lending decisions.
Having completed a process of deleveraging, both AIB and Bank of Ireland are now concentrating on growing their balance sheets. In this context, both banks recognise the need to increase business lending in the period up to 2016, including lending to the SME sector.
The Deputy will also be aware of the Government's success in developing alternative funding sources using the National Pension Reserve Fund, for example, the joint venture with Silicon Valley Bank which are designed to bring new technological capacity and fresh approaches to the funding markets for SMEs in Ireland.
