Economic council to meet banks on lending

THE GOVERNMENT’s economic management council will shortly meet the banks to discuss lending, Tánaiste Eamon Gilmore has told the Dáil.

“Unlike the practice of the previous government, this Government meets the banks regularly to discuss with them their progress or lack thereof in meeting their targets,” he said.

Mr Gilmore was replying to Fianna Fáil finance spokesman Michael McGrath, who said the latest Central Bank figures showed the mortgage arrears crisis was getting worse by the day.

“The arrears rate has increased by a staggering 60 per cent over the past 12 months,” he said. “The Government’s record in dealing with this issue has been feeble and ineffective.”

Mr McGrath said that earlier this week John Trethowan, head of the Credit Review Office, had signalled the pillar banks, AIB and Bank of Ireland, were in danger of missing their lending targets this year.

He had also noted that the banks’ lending policies needed to be reassessed and that they should be prepared to take on more risk, said Mr McGrath. “In other words, he confirmed what thousands of small-business owners have been saying for some time, which is banks are not fulfilling their lending obligations,” he said.

Mr McGrath said the Government had been led on a merry-go-round by the banks so far.

Mr Gilmore said the Government had set lending targets for the banks: €3.5 billion this year and €4 billion next year.

In respect of mortgages, the Government intended to publish its personal insolvency legislation this month, he added.

Mr Gilmore said the legislation would contain for the first time in Irish law non-judicial debt settlement arrangements which would be put in place and be of assistance to people in mortgage distress who needed to negotiate new arrangements with their banks.