A COMPREHENSIVE source of information on new lending and demand for credit was called for yesterday to ensure businesses were not dissuaded from applying for bank credit.
John Moran, head of bank restructuring with the Department of Finance, said such a source would be “key to showing the reality” of both the demand for and supply of credit.
At the annual Experian business lunch Mr Moran said the Government needed to “push ahead” with developing a strategy to put in place a more effective credit information system in Ireland.
“The establishment of a fully effective credit registry system will be key to improving the information available to banks to make sound assessments and to improve banking supervision,” he said.
Pointing to the fact “banks are prepared to lend”, Mr Moran said that in the 12 months to April 2011, AIB and Bank of Ireland loaned €8.036 billion in new and restructured lending – in excess of the joint target of € 6 billion.
Of the planned loan guarantee scheme to help cash-strapped small and medium-sized businesses, Mr Moran said work was “ongoing”, and the Government’s commitment would be for an initial period of one year with a review thereafter.
Mr Moran said the scheme “won’t solve all the problems”, and that projects will still need to be credible to avail of funding. Moreover, he said, it was important the initiative was not rushed.
“It needs to work, and work well,” he said.
Of the significant restructuring plans for the banking sector laid out in March, Mr Moran said “very considerable progress” had been made. Deposits were stabilising and confidence was on the rise.
“There is more and more confidence coming back into the sector generally,” he said.
As Bank of Ireland works on meeting its recapitalisation targets, Mr Moran said the outcome was as yet unknown.
“There are so many variables between now and July. It’s really tough to identify where we will get to,” he said.
Following Thursday’s High Court order for Irish Life & Permanent to proceed with the sale of its insurance arm, Irish Life, Mr Moran said a “radical restructuring” was on the way for the bank.
“A merger is not our first choice,” he said, adding he remained hopeful an external party might invest in the bank.
He was working on a “credit suggestions initiative”, he added, whereby he was asking the public to contribute ideas about improving the provision of credit.
He has already commenced discussions with banks on the feasibility of these and hopes to publish the suggestions shortly.
