Pat Rabbitte (Dublin South West, Labour)

The last quarterly report of the Central Bank expressed its concern about the fact that personal credit has expanded by 25% per annum since the last quarter of 2003. Specifically the Central Bank said that a situation where debt is increasing at a rate that is more than three times that of income is unsustainable. That is the Central Bank's view. What is the Government response to the Central Bank? Is it happy to see the rate of debt increasing at three times that of income? Is it happy to see personal credit expanding at 25% per annum?

Is the Government happy to see a situation, for example, that I heard in one of my clinics on Saturday? A father came to see me about his 19 year old apprentice carpenter son who was given a loan for €8,000 from a particular bank, not a branch of Allied Irish Banks. The son went back to the bank seeking another €4,000, but the bank said it could not top up his loan by €4,000. However, it withdrew the loan and gave him a new loan for €20,000. This was given to a 19 year old and there was no concept of the responsibility of that or what it meant.

We could only have a 25% rate of expansion in personal credit by irresponsible lending on which the Central Bank has rung the alarm bells on a number of occasions. This is a serious question. What is the Government's response to the Cental Bank's warning?

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