You can see it in the statistics and you can see it in the streets: we are borrowing and spending more now than at any time in the past. With low interest rates, traditional savers see little point in leaving their cash on deposit; the banks and other financial agencies are competing feverishly to attract borrowers.
Anyone stuck in traffic already knows this. Most new cars are bought on credit, and in the first three months of this year, people in the Republic purchased 1,689 Mercedes Benz and BMW automobiles. This compares to 1,137 for the whole of 1993.
The total number of new cars registered last year was 125,818. In 1993 there were just 60,792.
The figures for consumer borrowing (non-Government credit) from the Central Bank indicate an identical trend. From December 1995 until the end of May this year, the amount of money on loan has soared to £47.8 billion from £29.2 billion.
A closer look at the statistics shows where the expansion has occurred. Residential mortgages have gone from £8.2 billion in 1994 to more than £14 billion in May of this year; term or revolving loans jumped from £6.5 billion to £14.1 billion in the same period; instalment credit and hire purchase loans have risen from £116 million to £404 million. Overdrafts, however, climbed only from £2.6 billion to £3.7 billion.
Inside every bank, customers are supplied with an array of new loan products, most of them carrying the same message: why sacrifice when you can spend now and pay later?
As well as mortgages and car purchase loans, there are now special brochures for home improvements, holidays, and various other personal loans.
Bank of Ireland promises "hassle free borrowing with a personal loan" and suggests that the cash could be used for "a well deserved holiday, pay for education, buy some new furniture or a television and video".
Allied Irish Banks has a leaflet targeting graduates: "The change from student life to working life can mean quite a large outlay of cash. . . you may be moving apartment, adding to your wardrobe, taking that well-earned break after your finals or purchasing your first car this all costs money."
Ulster Bank offers home improvement loans from £500 to £15,000, with repayments over periods up to 10 years: "Home improvement loans are available for a multitude of purposes
double glazing, loft insulation, central heating, garden landscaping, kitchen or bathroom improvement or extensions."
National Irish Bank tells customers that "now those dreams don't have to be pie in the sky", offering tailored personal loans: "Sometimes, the things we want can seem far away and out of reach a sun-drenched holiday, a new three-piece suite, a state-of-the-art PC."
Smaller banks and building societies, as well as credit unions, are also competing to lend money. EBS, for example, offers customers a Visa card. First National Building Society soon to be First Active offers the full range to customers, including car loans and personal loans.
New companies have sprung up, offering leasing deals, credit on hire purchase agreements, and credit cards with lower APRs than the main banks.
"What we're seeing in Ireland at the moment are the classic symptoms of financial markets deregulation," says Mr Jim Power, chief economist at Bank of Ireland. "We saw the same thing in Britain in the 1980s. Basically, you now have a lot more institutions competing for the same business."
As well as the growing number of loan products and companies, lending institutions are striving for new and imaginative ways of gaining market share.
Some firms have set up telephone lines to give customers instant approval for borrowing. Bank of Ireland raised some eyebrows recently by writing to many customers to let them know that they had been pre-approved for loans. "Some people are saying: `What are you doing sending me out this stuff, I never asked for a loan.' But it's a competitive market, and we can't afford to just sit back and wait for the customers to come to us," says Ms Eilis O'Brien, media relations manager at the bank.
But if competition to attract borrowers has heated up, the deals they are being offered are not significantly different. Lending institutions admit that while the details, such as arrangement fees, may be slightly different customers will pay pretty much the same price for their money.
Prof Ray Kinsella of UCD's Banking and Finance Department sees a fundamental cultural change. There is now a consumer mindset for the first time in the Republic, he believes, generated primarily by lower interest rates and a stronger economy.
"The growth in house and home-related loans has been so pervasive and so sustained that it has to have had an effect," he says. "Disposable incomes have increased, and are expected to increase. So there has been a shift in expectations. There is now a spend-spend mindset."
Ultimately, he contends, growth in consumer spending of 20 per cent or more is not sustainable. He is also concerned at the growing amounts that ordinary families owe.
"It is inevitable that the household sector will become more and more indebted. There is a down side, which is that in the case of a local economic shock an example might be if Intel were to close or a national shock where the Irish economy reverses, people can be left unable to make their repayments.
Mr Jim Power echoes this worry: "It's fine when the economy is booming, when people's prospects are good, when wages and salaries are rising but the greater the indebtedness, the more vulnerable people are if times get hard."
