Deirdre Clune (Cork South Central, Fine Gael)
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Question 126: To ask the Minister for Finance if he has assessed the factors that have led to the accelerated rate of business failures here. [11572/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Sectoral policy in support of the enterprise sector and employment maintenance, including the Employment Subsidy Scheme and the Enterprise Stabilisation Fund initiatives, are matters in the first instance for my colleague the Tánaiste and Minister for Enterprise, Trade and Employment.

The prevailing economic environment has impacted on the rate of business failure here in Ireland. There are a number of factors affecting the viability of Irish business including the domestic correction in the residential construction sector along with the downturn experienced by our major trading partners as well as unfavourable exchange rate movements, particularly against sterling. In this context, appropriate economic and budgetary policies have been formulated by Government which seek to create the conditions for sustained growth and employment creation, going forward.

For my part, I am introducing measures under the forthcoming NAMA Act that should assist the flow of credit to viable businesses. I will shortly be issuing guidelines to ensure that SMEs, sole traders and farm enterprises will have resource to independent, external review of decisions of credit refusal by the NAMA-participating banks. Other banks not participating in NAMA or those covered by the Government guarantee may also decide to join the system. The banks must comply with the recommendations of the appeal process or explain why they will not do so. In addition to dealing with individual cases, the credit review system will examine credit policies and practices of the banks in respect of SMEs. This will help me decide on what further action might be necessary to secure the flow of credit which should help stem the rate of business failures as we move forward.