Fergus O'Dowd (Louth, Fine Gael)
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Question 153: To ask the Minister for Finance the discussions he had with a company (details supplied); if he envisages them having a role to improve credit in the mortgage sector; and if he will make a statement on the matter. [18840/09]

Fergus O'Dowd (Louth, Fine Gael)
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Question 154: To ask the Minister for Finance his views on the State taking over a company (details supplied) which could be used to improve the availability as opposed to just the approval of mortgages in the housing market; and if he will make a statement on the matter. [18841/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 153 and 154 together.

I have not had any discussions with the company the Deputy refers to. The Deputy will appreciate that a balance must be achieved by Government between influencing credit institutions through the bank guarantee scheme and other financial support initiatives while at the same time being seen to have a hands-off approach to the day to day running of these institutions which must operate on a strictly commercial basis. The Government took the decisive step of nationalising Anglo Irish Bank because corporate governance issues emerged that caused serious reputational damage to the bank at a time when overall market sentiment towards it was negative.

I would however like to point out to the Deputy that in response to the issue of credit availability in the mortgage sector, the Government has taken a number of important steps. Firstly, I announced in Budget 2009 that a new mortgage scheme for first time buyers and for self-builds, the Home Choice Loan Scheme, would be introduced through the local authority system and is available through authorised mortgage brokers. Secondly, as part of the terms of the recapitalisation of AIB and Bank of Ireland, those banks will provide an additional 30% capacity for lending to first time buyers in 2009. The banks have also committed to actively promote mortgage lending at competitive rates, with increased transparency on the criteria to be met. I fully expect that the banks concerned will meet their commitments under the recapitalised scheme to increase the level of credit available nationally.

Many lenders are conducting extensive advertising campaigns, showing that competition is a real factor on the mortgage scene. The existence of that level of competition in the mortgage lending market is sufficient, I believe, to ensure that credit institutions will offer mortgages to suitably qualified customers in order to remain competitive and retain their share of the market. As long as this remains to be the case, I see no need for the State to intervene in the market place by taking over the company referred to by the Deputy.