Gerald Nash (Louth, Labour)
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Question 99: To ask the Minister for Finance the position regarding the establishment of a strategic investment fund to support small and medium enterprises; the way the fund will be resourced; and if he will make a statement on the matter. [25697/11]

Michael Noonan (Limerick City, Fine Gael)
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As I said in a reply to a question from Deputy Ferris on 14 September last, ensuring that a strategic investment bank is operating in the domestic banking market, providing finance to large capital projects and acting as a conduit for venture capital as well as a lender to SMEs, is an objective in the Programme for Government. A comprehensive programme of bank recapitalisation and restructuring is currently underway following my statement on the future banking landscape in Ireland at the end of March last. The essential detailed assessment and planning work to meet this objective will be accelerated once the Government's key objectives for the renewal of the banking system, which are ahead of schedule, have been completed. This assessment will include the strategic investment bank's relationship with the two pillar banks and the time line for its establishment.

As regards the support of small and medium enterprises in general, the restructuring of the domestic banking sector creates capacity for the pillar banks to lend in excess of €30 billion over the next three years in SME and other important sectors. This is in excess of Central Bank estimates of the likely demand for SME and mortgage credit over this period. Both pillar banks are concentrating on the Irish economy and need to issue credit to make profits and rebuild their balance sheets.

As the Deputy may be aware, the Government has imposed lending targets on the two domestic pillar banks for the three calendar years, 2011 to 2013. Both banks will be required to sanction lending of at least €3 billion this year, €3.5 billion next year and €4 billion in 2013 for new or increased credit facilities to SMEs.