Lending tops agenda for finance ministers
ASSESSING Northern Ireland's economy and the state of bank lending to business is made more difficult by a lack of clear data, it's been claimed.
David McNamara, an economist at Davy Stockbrokers, spoke as Finance Minister Simon Hamilton held a meeting with Michael Noonan his counterpart in the Republic, kicking off a series of meetings with figures from the banking world.
Mr Hamilton said: "Too many businesses are still having difficulties in accessing finance... That is why I wanted to take this early opportunity to meet with Minister Michael Noonan to discuss the approach being taken to address the problems in the Irish banks and how this is being applied to their operations here in Northern Ireland."
Of Northern Ireland's four main banks, three are headquartered in Dublin (Ulster Bank, Bank of Ireland and First Trust) and one in Copenhagen (Danske Bank).
Wilfred Mitchell, FSB policy chairman, said finding out about how much banks were lending was its top priority. "The concept of an upturn is great and there are indicators of that. but the banks are still along way behind that," he said. "They seem to be following it rather than leading it."
David McNamara, the co-author of a review of the Northern Ireland economy earlier this year, said his main critique of Northern Ireland's banking system was the lack of data on lending to SMEs and households.
He said: "Anecdotally we hear of firms being refused credit overdraft facilities but it's very difficult to verify that."
While Northern Ireland was part of the wider Bank of England monetary system, it was not scrutinised to the same extent as Great Britain, and only Ulster Bank had joined the BoE's Funding For Lending.
"Our conclusion was that Northern Ireland is neglected in terms of the scrutiny of its financial system," Mr McNamara said.
"What we need is proper statistics from all major lenders so you can make an attempt to understand the problem and scale of debt and what the growth – or probably decline – has been in lending to SMEs over the past five or six years. Until then can we only make assumptions based on trends of the Republic and rest of the UK."
Policymakers needed to be more vocal, he said.
"The focus has been on corporation tax as an issue for the industrial economy, and that's very important, but there also needs to be focus on lending to the real economy."