Bank lending to be monitored -Lenihan

Minister for Finance Brian Lenihan has warned that, if necessary, he will use his powers under Section 210 of the National Asset…

Minister for Finance Brian Lenihan has warned that, if necessary, he will use his powers under Section 210 of the National Asset Management Agency Act 2009 to ensure banks do not continue to refuse loans to customers who have made a successful appeal to the Credit Review Office.

Mr Lenihan was speaking at a news conference in his Department on the publication of the first quarterly report of John Trethowan of the Credit Review Office and the €12 billion lending plans for Bank of Ireland and Allied Irish Bank which outline how they will achieve a target of €3 billion lending per annum by each institution over the next two years.

Mr Lenihan said there would be monthly progress reports from the two banks to ensure they delivered on "the strong commitments given in their plans to support viable businesses in all sectors of the economy and in every area of the country”.

Mr Trethowan said: “There are times, especially when the lending is difficult, [that] there is a refusal to respond to borrowers. There are long periods of silence: the banks aren’t communicating enough with the customers who need to find an answer to the queries they’ve been raising to the banks.

READ MORE

“This is not just one one bank but I think across the board. It’s not just AIB and Bank of Ireland but other banks are practising the same tactic as well.”

Labour’s enterprise spokesman Willie Penrose TD said in a statement afterwards: “The government has committed vast sums of taxpayers' money to the banks. The very least that should be expected from the banks is that they should again turn on the credit supply that is the lifeblood of the economy."

Sinn Féin finance spokesman Arthur Morgan TD said: “This Government is adept at announcing schemes and plans, but their record on seeing these through to fruition leaves much to be desired”.

“The publication of the lending plans for Bank of Ireland and AIB, promising to deliver at least €22billion in credit to SMEs, is welcome, however, unless they are accompanied by resolute action and enforcement by the Government, they will mean nothing.”

Deaglán  De Bréadún

Deaglán De Bréadún

Deaglán De Bréadún, a former Irish Times journalist, is a contributor to the newspaper