The latest report on lending figures from the Central Bank is a damning indictment of the Irish banking system and must act as a wake-up call for the Government, according to Fianna Fáil Seanad Spokesperson on Finance Darragh O’Brien.
“This is the most authoritative study on credit demand and supply yet, and it cannot be ignored by the Government or the banking sector,” said Senator O’Brien.
“It comprehensively rebuts the arguments put forward by the banks for their weak levels of funding and proves that they have been sugar-coating their lending figures, and that the Government has simply accepted this without question.
“The desperately weak level of lending is strangling the life out of the domestic economy. At the moment banks are turning away viable customers with good business plans who can fully repay their loans. This is both damaging to the wider economy and to the banking sector itself. It ultimately translates into significantly reduced economic activity, more job losses and an unprofitable banking system.
“The Irish Banking Federation’s rejection of this report today is extremely worrying and emphasises the need for strong political leadership. It is time for the Government to wake up and stop living in denial about the extent of this crisis. The only way the banks can return to viability is if they grant profitable loans to good businesses. The banks should aim to meet their targets for reducing their loan/deposit ratio as set down by the Troika in a way that focuses on selling off their overseas loan books while preserving core lending in the domestic economy. As the owner of AIB and 15% shareholder in Bank of Ireland the Government needs to tackle this head on and ensure that lending targets appropriate to the needs of the economy are fully met.
“Fianna Fáil will be raising this at the earliest opportunity on the resumption of the Dáil and Seanad next month. In the meantime I am calling on the Government to immediately clarify if they accept the findings of this report.”