Banking finally moves in positive direction

For the first time in almost a decade there are signs that our banking system is getting back to normal, beginning to operate within proper parameters and finally lending to businesses, home buyers, and other credit worthy customers.

The first of these was a stage-managed affair yesterday by Finance Minister Michael Noonan, but nonetheless welcome for that. Mr Noonan and Public Expenditure and Reform Minister Brendan Howlin met Wolfgang Schaeuble, the German finance minister, and Werner Hoyer, the head of the European Investment Bank, for a signing ceremony to an agreement that will put money into the State’s new strategic investment bank.

The agreement will make it easier for smaller businesses to get low-interest loans. The new Strategic Banking Corporation of Ireland is getting €150m from the German state bank, KfW, and a similar amount from the European Investment Bank. The Government is supplying an initial sum of €500m. From December, loans will be available to SMEs through Bank of Ireland and AIB. The most vital element is that those loans will be accessible on more flexible terms than currently available from commercial banks.