Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I move amendment No. 5:

In page 6, between lines 16 and 17, to insert the following:"(2) The Minister for Finance will ensure the Central Bank has recourse to supervisory measures, including imposing capital requirements for borrowers from the SBCI who do not lend to the real economy as laid out in subsection 1(g) and (h).".

We touched on this issue earlier. This amendment arises out of the concern expressed by myself and other members that the banks will suck up this cheap money and lend it to customers to whom they were going to lend anyway, resulting in this not having any big impact on the SME sector or that the banks will lend on the money as overdrafts turned into loans and so on and then dress that up as new lending to SMEs. What sticks are available to us with which to beat the banks if they do this?

The Minister mentioned that the banks would be required to prove to SBCI that funding was being used for SME lending. What protections exist in this regard and what level of oversight does the Central Bank have in this regard? Also, what penalties can the Central Bank impose on banks if funding is not properly passed on? The amendment is structured to provide for a system similar to the mortgage arrears targets and the Central Bank's power to impose additional capital requirements and so on. However, the situation in the SME sector is different because of the way in which the banks are dealing with non-performing loans and so on. The amendment calls on the Minister to ensure that the Central Bank has recourse to supervisory measures, including imposing capital requirements for borrowers from the SBCI who do not lend to the real economy as laid out in subsection 1(g) and (h). What measures are in place to ensure this lending takes place in the manner intended?

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