Professor Philip Lane:

One of the issues that became obvious throughout the resolution of the banking crisis is the importance of separating personal debt from corporate debt. In this kind of case, where a small firm looks for credit, the way a bank assesses that firm’s prospects is one of the big challenges for the Irish banking system, for example, does it have credit assessment policies that can assess small business loans on the basis of the prospects for that firm, as opposed to asking who owns the firm and what is that individual’s credit history.

I share the aspiration that there should be a much bigger separation between personal debt and the kind of credit available to a small firm. In any individual case where the finances are co-mingled, I would need to know the details. There is an ombudsman appeals process, and this is helped by the new regulations for SMEs. I would encourage the person involved in this case to pursue the appeals process to see what can be done.