Mr. John Trethowan:

Before we started, we did not know whether there would be a flood or trickle of applications. The stream probably has been increasing. At present, we are receiving more applications than we did at the beginning. To some extent, the numbers are not very relevant in that if any of the 80,000 applications referred to is declined, the bank is obliged in the first instance to advise the applicant of its internal appeals process and of the process of the Credit Review Office. When the banks decline an application, they do not know who will approach the Credit Review Office. This has upped the game of the banks in the past two years in that they must meet a standard against which they know they could be measured if my office were to receive an appeal.

One reason people may not approach us is that they may be so weary on being refused by their banks that they do not want to go through another process.

We have refined our Credit Review Office process from April 2010. Ms Catherine Collins has worked hard to make it as simple as possible and we have further work to do to try to cut down any administrative overhead. In fact, we now are getting to the stage at which people will simply approach us stating they wish to appeal and we will do most of the work for them thereafter. We must engage them and work with them to find out about their business, but we try to make that as painless as possible.

As for the troika's suggestion regarding restructuring, it only came out with it at its last visit approximately three or four weeks ago and it will take a while for that to work through. Members should bear in mind what I said about trade debts. There will be some businesses which do not make it through this process and all the people they have as creditors will be obliged to take losses on their trade books. A message I impart to businesses every time I speak to them is to watch their own trade books because that will be their Achilles heel. On the question of internal bank appeals, members really must ask the banks. We report this each quarter, and I can see that AIB is overturning a lot more of its own decisions while Bank of Ireland is overturning very few. It may be the view of Bank of Ireland that it its happy with its credit process from the outset but again, that is a question for the banks. I cannot comment on that. On our actual appeals and those which were overturned, there is not much difference between the two banks, and consequently I cannot draw any conclusions from the internal appeals.

On the demand for loans, one must also consider the economy and its present state in comparison with the position in 2007. We have an economy that shrank by 25%. Businesses have downscaled accordingly and the size of the business, the number of employees, the working capital requirements and stock holdings all have come down to reflect this. If a business has not copped on to the situation, it has basically gone out of business. There is also a lack of demand for new investment. People are not building new showrooms or new shops because, at present, they cannot see a return on the investment or how to service the debt. Consequently, there are pretty identifiable reasons demand for credit is lower now than would have been the case in 2007. For me, the challenge will come as the economy picks up and people start to become more optimistic and want to trade at higher levels, which will require more working capital and may require the investment of money. At that stage, when such people approach the banks, we will be looking to the banks to make sure they do not stifle any recovery that is happening. Certainly, the Credit Review Office will be needed most whenever the demand for credit actually rises.