Govt agrees to meet banks over credit squeeze and mortgage crisis – McGrath
Published on: 07 June 2012
Fianna Fáil Finance Spokesperson Michael McGrath TD has welcomed the Government decision to seek a meeting with the banks following the report of the Credit Review Office that banks are not lending appropriately to small businesses as well as the worsening mortgage crisis.
Deputy McGrath said: “I raised these issues with the Tánaiste in the Dáil today and urged the Economic Management Council to meet the banks as a matter of urgency. The Tánaiste said the Government would be meeting with the banks but failed to give indication when this was going to take place.
“Fianna Fáil has been stating for some time that the performance of the banks when it comes to lending to the small businesses was not up to scratch. The essence of the warning from the head of the Credit Review Office, John Trethowan, this week is clearly to signal that AIB and Bank of Ireland will not meet the lending targets set down. The benchmark on which the banks should be measured is on the amount of new lending that is actually being injected into the economy. Businesses need credit to grow, create employment and help list the domestic economy.
“The Government is failing to hold the banks to account and ensure that they take appropriate risks to support growth and job creation. Similarly the acceleration in the mortgage arrears crisis is not being addressed with the urgency that is required. The official rate of mortgages in arrears of 90 days or more is now over 10%. This represents a massive 60% increase over the last 12 months.
Deputy McGrath said: “The Government’s record on the mortgage crisis is stark. Since the publication of the Keane report only one mortgage-to-rent transaction has been completed, not one of the promised 100 independent mortgage advisers has been appointed, no split mortgage arrangements have been put in place for customers and the Personal Insolvency Bill has been delayed time and again.
“The Central Bank figures show that 77,630 private residential mortgages are now in arrears of more than 90 days. These are families across the country who are struggling to cope. The Government and the banks are not doing enough to support families in difficulty and under enormous stress. The mortgage, debt and credit crisis in the economy demands leadership and action, and the Government has failed to step up to the mark.”