Professor Patrick Honohan:

That relates to the question asked by Senator Kathryn Reilly on how the Central Bank is monitoring mortgage lending and lending by the banks generally. We are very concerned with ensuring that while we repair the banks or while they are being repaired, that they can still provide the credit and services that are needed. One may complain about the ECB as much as one likes. For better or for worse, it has lent our banks enormous sums of money so that no bank comes to me and says, "We would lend more if only you could find us a bit more liquidity". No bank says that because that is not their problem. They do not lend probably because at all sorts of levels in a bank, decision-makers have become more risk-averse. They have seen what has happened to their bank and their colleagues for making loans that went sour. It is sort of easier to say "No" than to say "Yes".

Everyone complains about not getting money from banks both in good times and in bad times. On the question as to what extent the Irish banks are out of line now or if there is a danger that we are trying to push them into something more reckless as suggested by Senator Reilly, in so far as we can judge the Irish banks are still less prepared to make loans to small enterprises than banks in other parts of Europe. The survey evidence still shows Ireland as being not as bad as Greece but over towards that end of the extreme. However, we are not hearing so many anecdotal complaints. Members of the committee are politicians-----