Kieran O'Donnell (Limerick East, Fine Gael)

My question is about the expected credit conditions. It appears NAMA will provide orders for a mechanism for appeals regarding loans or overdrafts not granted. Will the Minister specify to the banks the level of credit they must provide? Will the Minister confirm that all the development and property loans of the institutions will be taken over by NAMA? I refer to the recently published accounts from AIB. A total of €23 billion of development loans will be taken over by NAMA but there remains €27 billion of property and construction sector loans on the AIB balance sheet. Will the Minister confirm this point? If property and construction sector loans remain on the books of the banks such loans will further deteriorate and the banks will not be freed up.

Will the Minister comment on the announcements by the banks that interest rates will be raised for the mortgage and small and medium-sized enterprise sectors. NAMA will provide liquidity to the banks but that might be accompanied by lower deposit interest rates because they may not need to access deposits. There appears to be nothing in what the Minister is providing. Will he consider putting in place a bank guarantee scheme to ensure that credit flows to small business, along the lines of the national recovery bank?

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