'Two Banks a Month' to Be Quizzed on Lending

Article excerpt

Byline: John Lee POLITICAL EDITOR

TWO major banks will be hauled before Oireachtas committees every month to give detailed information about their lending to small businesses and private customers, a senior Government source said yesterday. But small businesses struggling to have their short-term credit extended are likely to be deeply sceptical of Government threats to force Bank of Ireland and AIB to start lending to small businesses again.

Only three months ago, Enterprise Minister Batt O'Keeffe said the Government would be surveying the experiences of small businesses before meeting the banks to discuss their lending policies.

With the renewal date for the bank bailout fast approaching, the Government believes it now has the banks 'over a barrel' and can force them to lend to SMEs before renewing the State life-support.

Appearing before th e Oireachtas Committee on Enterprise, Trade and Employment in June, Mr O'Keeffe said the Government was 'not totally happy' with certain aspects of the plans put forward by the banks in relation to small and medium enterprise lending.

He said staff from his department would be surveying the SMEs to gauge their experiences with banks before he meets the financial institutions to discuss their lending practices.

A close colleague of Mr O'Keeffe's told the Irish Mail on Sunday yesterday: 'We have discussed the banking issue in depth in Government and we are going to force the heads of the major banks to come into the Finance Committee and the Oireachtas Committee on Enterprise and explain exactly how much they are lending to small businesses. …