Easier access to credit essential to economy, says Lenihan
Published 21/10/2010 | 05:00
Irish banks owe an enormous debt to the taxpayer and it's essential they resume services to their customers for the benefit of the wider economy, Finance Minister Brian Lenihan told the Irish Banking Federation's annual conference in Dublin yesterday.
The last year has been "very turbulent", Mr Lenihan said.
However, he believes there are signs of stabilisation and the beginnings of recovery.
"We have now drawn a line under our banking crisis," he said, commenting on his September 30 statement.
The final cost, although large and shocking, has been established and is manageable, he added.
Mr Lenihan yesterday said the annual cost of the €50bn bank rescue will be between €1.3bn and €1.7bn.
He said the banking crisis had been a major distraction in efforts to address the gap in the public finances, adding that the budgetary challenges in meeting the commitment to reduce the budget deficit to 3pc of GDP by 2014 are "daunting".
"But there is no way around it -- fiscal sustainability is a foundation stone of economic growth and new job creation," he added.
Meanwhile, Mr Lenihan confirmed that two bidders had been finalised for the acquisition of the EBS.
Efforts to sell the building society come against the backdrop of a European Commission probe into the €875m in state support earmarked for EBS. The probe was announced last week after Brussels said it had "concerns" over "whether the distortions of competition caused by the aid to EBS are sufficiently addressed".
"On the interest that has been expressed in the Educational Building Society, I understand the National Treasury Management Agency has finalised a list of two preferred bidders," Mr Lenihan said. "I have yet to see its submission but I understand it has prepared one in that regard.
"The Educational Building Society will continue to be examined and benchmarked against the possibility of a straightforward state investment because that is the third option for the society."
Donal O Donovan and Patricia McDonagh