Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The problem at present is that households are trying to pay back debt, the Government is trying to reduce its overall indebtedness and the banks are trying to reduce theirs. The combination of all of that makes economic recovery much more difficult.

I accept there are a number of reasons that credit is not flowing as we would like it to. Part of it is that the banks do not have an appetite for risk and that demand is weak in an economy that is weak. However, I ask the Minister to go back and look at the definition of the targets for the banks and at the measurement of those targets. Last year, only €2.5 billion of the €8 billion credit was new lending and the same SME sector paid back €4.5 billion, so the total stock of credit available to SMEs shrank by €2 billion. Those are the hard facts, confirmed by the Credit Review Office.

Something is wrong and I am trying to get under the skin of what is going wrong and why credit is not being made available in the way we would like it to be. Deleveraging is one issue, but I ask the Minister to go back and look at the targets.

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