Bernard Durkan (Kildare North, Fine Gael)
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Question 104: To ask the Minister for Finance if banking policy in 2010 has changed to meet the needs of the current economic climate; the steps he has taken to achieve this objective; if he has sought any information from the banking sector with a view to ensuring the availability of the necessary capital for the manufacturing, commercial, services and other sectors; if any such response is adequate to meet current requirements; and if he will make a statement on the matter. [11665/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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My Department receives a range of reports on developments in the banking sector from the Central Bank, the Financial Regulator and the NTMA. In addition, both Allied Irish Bank and Bank of Ireland submit quarterly reports in respect of the credit packages they implemented under the terms of their respective recapitalisations. I have outlined the range of reports received in more detail in a further question submitted by the Deputy for answer today. The second Mazars report on credit availability, published in December, confirmed that while some businesses are facing significant challenges accessing credit, and the SME sector in general is more conservative in its borrowing, nevertheless businesses surveyed confirmed that new lending is still taking place. However, the proportion of refused credit, especially in certain sectors, remains a concern for Government.

To help address this concern, under the NAMA Act I will shortly be issuing guidelines to ensure that SMEs, sole traders and farm enterprises will have recourse to an independent, external review of decisions of credit refusal by the NAMA participating banks. I hope that banks not participating in NAMA or covered by the Government guarantee will also decide to join the system. My aim is to have a simple, effective review process, run by people with experience and credibility. The banks must comply with the recommendations of the review process, or explain why they will not do so.

In addition to dealing with individual cases, the credit review system will examine the credit policies and practices of the banks in respect of SMEs. This will help me to decide what further action might be necessary to secure the flow of credit. I intend to publish the analysis from the review process so that the performance of the banks participating in NAMA will be clear to all. Mr John Trethowan, an experienced banker with a demonstrated commitment to public and social service, is overseeing the establishment of this credit review system with initial administrative support from Enterprise Ireland. Work has been ongoing since December on the logistical aspects of the review system and it is envisaged that Mr. Trethowan will be in a position to commence reviews shortly.