Is a lack of action by the domestic Irish banks hindering Ireland’s economic recovery?

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Behan, Mary
Issue Date
MSc International Banking and Finance
Dublin Business School
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The Ireland’s two pillar banks AIB and Bank of Ireland have announces post provision profits on their 2014 half yearly statements. The ERSI, report that Ireland’s economy is in recovery, a fragile recovery. SMEs access to credit is funnelled from the ECB to European SMEs through European banks easier access to the low interest rate Euro. However, the legacy of the banks’ reckless lending is still remains. The aim of this research to ask the question - Is a lack of action by the Domestic Irish Banks hindering Ireland’s Economic Recovery? Through the method of qualitative interviews and documentary analysis the author concludes that there is no consistency in addressing consumer debt across the banking system. The SMEs are driving Ireland’s economic recovery and not the banks. In order to strengthen Ireland’s recovery viable and struggling SMEs with a viable core business require access to credit on an increasing and monitored foundation over the next couple of year. However, Ireland’s domestic banks are meeting the lending targets nevertheless the level of established sustainable mortgage arrears solutions is low with a number of re-defaulter accounts being estimated at 16 percent in one of the pillar banks. In order, to survive SMEs need to generate revenue from Ireland’s internal market. This can only occur through the location of a new customer. Therefore, Ireland economic recovery is not only dependent on the supply of credit; it is also dependent on internal personal consumer demand for their products and services.