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Noonan: The Central Bank and Morgan Kelly should ‘have a conversation’

The Finance Minister has said that the Central Bank has “primary responsibility” regarding SME loans.

Michael Noonan (File photo)
Michael Noonan (File photo)
Image: Laura Hutton via Photocall Ireland

Updated 10.30pm

FINANCE MINISTER MICHAEL Noonan has said the government are taking economist Morgan Kelly’s predictions about the possible collapse of the SME sector seriously.

Noonan welcomed Morgan’s comments in a lecture at UCD last week where he warned of the impact that bank stress tests will have on small businesses that have debt issues.  Kelly suggested that the Irish economic recovery is masking underlying problems in the SME sector.

Speaking in Brussels this evening, Noonan said: “I think it’s very important that very good academic economists get involved in the national debate and Morgan has a good record in the past.

“Anything he says, we take it seriously … He was correct before, when nobody else was.”

Noonan said he would like to examine “in detail” Kelly’s view that many SMEs could be wiped out after the European Central Bank conducts stress tests on Irish banks later this year.

The Minister suggested the Central Bank should contact Kelly as it has the “primary responsibility” in this area. He added that it would be helpful if the bank and Kelly “got together and had a conversation about his concerns.”

He said that Bank of Ireland has restructured 90 per cent of their SME loans to date, while AIB has restructured 65 per cent.

“The Central Bank have expressed that they’re satisfied with the progress being made,” he added.

Noonan was speaking while on his way to a Eurogroup meeting of Economic and Finance ministers in the Belgian capital today.

Originally published 5.53pm

Background: Morgan Kelly warns SMEs could ‘go under’ taking a big chunk of the Irish economy

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Órla Ryan

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