Brian Cowen (Laois-Offaly, Fianna Fail)

In my previous capacity as Minister for Finance, I was obviously in constant contact with the sector through the Central Bank mechanism and other mechanisms. This was to ensure that, in dealing with the situation that has arisen with regard to international financial market turbulence, our banking system was able to operate appropriately and properly despite the fact that an international credit squeeze was taking place, for which I was to take some responsibility, according to the Deputy yesterday. With regard to the question of the banks providing finance, while there is this international situation of which we are all aware, I agree it is important that banks continue to provide prudent risk to business and that the performance of Irish business during the good times should stand as a strong criterion for continued support for those businesses which continue to invest and to require access to finance.

It is true there has been difficulty with regard to inter-bank lending. The provision of money supply has been an issue in international banking circles for over nine months and the provision of money beyond 30, 60 and 90 days has not been as plentiful as would have been the case in the past. This is as a result of the lack of trust that has emerged due to the outcome in the United States of the developments in the sub-prime market there and the ripple effect this has had on wider banking circles.

It is important to point out, however, that, as the Central Bank has confirmed, the Irish banking system is well capitalised and is in a healthy state in terms of its own financial situation. I would agree it is important that while we recognise there has been a change in the international environment, and indeed the domestic environment, the banking system remains an important access point for capital for the development of markets and companies, and their ability to continue to trade. This is a point that will be continually made both by me and my successor in the Department of Finance.

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