Varadkar: Banks need 'skin in the game' to avoid reckless lending through Covid credit guarantee scheme

Tánaiste Leo Varadkar. Photo: Gareth Chaney/Collins

Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar has defended the Government’s decision to take on 80% of the risk under the Covid-19 Credit Guarantee Scheme saying it was important for the banks to “have some skin in the game.” 

The Government cannot force the banks to lend to businesses he told RTÉ radio’s Morning Ireland, so it was important for the bank to have 20% of the risk otherwise there would be no disincentive for reckless lending, he said.