LOW LOAN DEMAND REPORT QUESTIONED - The Credit Review Office was set up almost 18 months ago to help small firms who had applications for credit turned down by AIB or Bank of Ireland to appeal the bank's decision.
It has warned that the two banks are unlikely to meet their targets of €3 billion each in lending to small and medium-sized businesses this year because of a lack of demand.
The fifth quarterly report from the group suggests that the main reason the banks won't meet their targets is that most firms are focused on repaying loans rather than getting new ones.
Last year AIB and Bank of Ireland between them lent €8 billion, going over their target of €6 billion. Mr Trethowan said some of this lending was new money, but some was debt restructuring. But he added that succh restructuring was important as it had saved many businesses and jobs.
John Finn of Treasury Solutions in Cork said the evidence suggested there was still plenty of demand for loans from businesses.
Mr Finn said the threshold level for the Credit Review Office was still too low, and said there should be more clarity on what constituted a refusal of credit by banks. He said changes in terms and conditions and loans could be the same in some cases as a refusal of credit for firms,
Mr Finn also said there was a fear that firms - by overturning a decision through the CRO - might 'win the battle but lose the war' against the banks. He said firms needed more certainty about long-term funding.
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NEWS AND CURRENCIES - Ulster Bank has lowered its outlook for the Irish economy this year. Its latest report suggests that Ireland is on track for a return to positive GDP growth this year, but that a deterioration in the global outlook is set to slow that recovery down.
Economist Simon Barry says, however, that evidence of weaker than anticipated growth internationally and in some of Ireland's key trading partners, including the US, UK and euro zone, implies a less favourable outlook for Irish exports.
On the currency markets this morning, the euro is trading at $1.4539 and 88.66p sterling.
