HOUSING MARKET:BANKS WERE accused yesterday of stoking the property boom by lending recklessly to householders, lenders and investors.
Labour finance spokeswoman Joan Burton said they had been responsible for a "construction bubble". She said she had calls from construction workers who were encouraged to take out a buy-to-let mortgage along with a residential mortgage.
She also accused banks of inflating the price of land by lending money just for speculative purposes.
Willie McAteer, the executive director of Anglo Irish Bank, said banks had actually been "prudent" in their lending. He said that the financial regulator had placed a 150 per cent risk weighting (the value of assets against the value of money being borrowed) on all money borrowed for development.
"I can't think of any bank that has been reckless," he said.
The managing director of AIB, Donal Forde, said that the value of a property was only one of the criteria used for issuing loans. "The issue for us is what they have borrowed from us and where we are getting the repayments," he said.
