Peadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

One of the big failures of the Government has been its inability to create a functioning credit market. The dysfunctional credit market is a significant player in many of the problems we have in the State, for example, in the housing market where we have not been able to get credit into the hands of builders to meet the demand for housing. It has also played a significant role in the problems affecting small businesses. Much legacy debt is still in place. Many businesses are frozen out of growth and development because they are unable to service their loans or at least grow beyond servicing their loans.

One of the reasons we have this dysfunctional system is because the Government has created an oligopoly when it comes to banking. I mentioned this earlier in the debate on the Finance Bill. The Government decided to have a very concentrated and limited banking market when it created two pillars and a few smaller players. This oligopoly will behave like one.

In other words, in the market there is seller power and buyer weakness, which manifests itself in the behaviour of the banks. Yesterday’s announcement by Bank of Ireland that it would prohibit individuals from accessing less than €700 or lodging less than €3,000 at a desk is an example of people abusing their seller power in the market. It can be seen left, right and centre in high mortgage interest rates, high business rates and the closure of small banks around the country. If we had a more diverse and less concentrated banking market, there is no doubt in my mind that it would create far more competition and power among buyers and many of the problems regarding credit and access to finance would start to dissipate, but that does not look like it will change any time soon.

The Minister of State mentioned - fair play to him for doing so - that because of the malfunction of the credit market, the Government had been forced to create an ecosystem of financial products. That is a pity because it should have put the effort into fixing the initial market. This ecosystem was discussed at length by all sides in 2011 and 2012 and we mentioned that it needed to be customer-orientated from the start. It needed to be built around individuals. In 2012 the Government stated it would create a mechanism to allow €450 million be made available in business credit over the period of three years. There was big fanfare and the Taoiseach, the Tanáiste and the Minister for Jobs, Enterprise and Innovation were involved in the announcement. We were told it would provide much-needed credit for job-creating small and medium enterprises, SMEs, which were struggling in the market.

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