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

I welcome Mr. Spring and Dr. Somers, with whom I would like to raise a couple of points. This is the third set of hearings on this matter. The context is simple - a general distrust of the public in the banking system and a lack of understanding or faith in the public interest directors. Section 48 of the Act has been quoted at length. There is clearly a need for the Minister to put in place guidelines for transparent lines of reporting, which is currently lacking in the system.

I would like to touch briefly on the €600 million referred to. We met previously with officials from the Bank of Ireland and Allied Irish Bank at which time officials from the Bank of Ireland stated emphatically that the figure of €3.5 billion represented new lending. Mr. Duffy from Allied Irish Bank stated that €600 million of the €3.5 billion was new lending and the remainder represented restructuring. Be that as it may, €600 million in new lending is very little. I do not concur that there is no demand for lending. The problem is the type of lending available. The banks have become extraordinarily risk averse. We are trying to get the SME sector going. What I am hearing on the ground from the SME sector is that much depends on the individual within a bank with whom an applicant is dealing. I believe there is a need for the banks to put in place defined communications structures in regard to dealings with customers. I am astounded to hear there was no risk committee in the bank.

I would like to hear from Mr. Spring and Dr. Somers regarding the type of structures around loans that were in place in AIB when they took up their appointments on the board. Dr. Somers referred to his relationship with AIB when employed by the National Treasury Management Agency in terms of its capacity to invest in Government bonds. What is the current position in that regard? I would like if the witnesses could give us a flavour of what they found when they took up their appointments. For example, if the bank had no risk system in place at that time, it should offer some leverage in terms of its dealings with people in difficulty with mortgage loans etc.