Banks are weak link between capital and enterprise, so why not eliminate them?
The first question to ask when information enters the public domain is always "Why?"
With so many bright, well-paid people employed by government, banks and lobby groups to "finesse the message" it should be remembered that information is only a weapon to those that control its content, timing and texture.
Therefore, I'm afraid any bullish statements issued by the financial institutions to the effect that they are loosening purse strings to Irish business must be welcomed with a jaundiced handshake.
Likewise, the yelps of the business lobby groups are, one feels, standard salvoes loosed off in an attempt to crudely blame the banks for all the ills of a business sector that got too fond of its own boom-era girth.
The information I most trust comes from those who believe that its dissemination will do little or nothing to help their cause, save get it off their chests.
Entrepreneurs
Most entrepreneurs I come in contact with -- from grocers to IT -- say the same thing.
Business overdraft facilities are getting harder to maintain and the charges for maintaining banking business accounts are stealthily rising.
This is a logical result of the death of competition in business banking. No longer can an enterprise threaten a bank with the removal of its business as there is no guarantee that another bank will exceed or even match their terms.
What we are talking about here is the increasing difficulty of managing working capital and if cash at bank and on hand is hard to secure, the impact on a business's ability to put its balance sheet into the correct condition to attract investment capital is marked.
The time has come, therefore, for the government to refloat the Business Expansion Scheme in a way that chimes with current needs.
Fresh capital
Imagination will be required to come up with a framework that can deliver fresh capital to businesses in return for equity.
It must also reward the PAYE sector, who are struggling to keep up pension contributions in the land of the levies and it must provide a plausible exit strategy for those willing to invest larger amounts.
The Government must redeploy the bloated labour force in finance and enterprise-linked departments -- not outside consultants -- to quickly come up with a list of qualifying criteria for cash-starved Irish businesses.
The individual investor can then make up their own mind on the businesses that are approved for the scheme.
Banks are not performing their traditional role as middlemen between capital and enterprise so why not cut them out altogether?
