Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

Mr. Moran missed my point, which is a straightforward one. Our understanding was that the banks were more than adequately recapitalised in terms of various rounds of recapitalisation. There appears to be a divergence between the two main banks. Bank of Ireland maintains that its €3.5 billion is all new lending while AIB says approximately 17% of the €3.5 billion - €600 million - is new lending. I appreciate what Mr. Moran said about preparing balance sheets but what is happening on the ground in a practical sense is that a typical SME has an overdraft facility of €10,000. SMEs are down to the wire and under constant pressure. In many cases they are probably over-trading. When the overdrafts come up for review they are effectively reclassified as a term loan and the overdraft facility is withdrawn. There appears to be a difference between the two main banks. Bank of Ireland states it is lending the full €3.5 billion as new lending. There must be some element of risk. The credit guarantee scheme now being introduced should remedy that but perhaps the issue should be taken up with AIB in particular because in order to reduce unemployment we must get the SME sector to flourish again. One cannot do that without credit. AIB came before the committee first and then Bank of Ireland came before us. The Department has an SME funding consultation body which could take up the matter with AIB.