Bank chiefs face committee grilling

SENIOR bank officials will appear before a Dáil committee today to explain to small businesses why successive interest rate cuts have not improved the availability of loans.

The managing director of AIB, Donal Forde, and Bank of Ireland’s chief executive of retail financial services, Ritchie Boucher, will be asked to answer queries from representatives of small and medium-sized businesses.

Chairman of the Oireachtas finance and public services committee Michael Ahern said the meeting was scheduled because the frozen credit markets have become a severe handicap for small operators.

“There is a situation that has been ongoing for the last number of months about access to funding. This is funding for loans for business and loans for overdraft facilities because many small businesses have had their overdraft facilities cut.

“The banks have indicated there are ring-fenced funds available for small businesses but people need to know how to access this,” said Mr Ahern.

The committee has already received presentations from the Small Firms Association, the Irish Small and Medium Enterprises Association and the Irish Hotels Federation. However, the banks will not be quizzed specifically on the recapitalisation programme.

Separately the committee has requested Finance Minister Brian Lenihan and banking chiefs to come before it to discuss the €10 billion recapitalisation programme announced at the weekend. This will not take place until the new year with January 21 pencilled in as a tentative date for the meeting.

This month the European Central Bank cut base interest rates by 0.75%, its third cut in as many months.