THE BIGGEST problem facing banks is credibility, Minister for Finance Michael Noonan has said.

“We cannot believe the banks; we cannot believe what they say,” he added.

“Look at what is happening in the City of London at the moment and one will get examples in 9ft high letters of what the key problem is.” He said he hoped Ulster Bank and Royal Bank of Scotland (RBS) moved very quickly to restore credibility because they must be suffering very big reputational damage.

Mr Noonan said senior management in those banks had to accept responsibility but that was what a board of directors was for.

The Minister was replying to Fianna Fáil finance spokesman Michael McGrath, who asked if it would be appropriate for the chief executive of Ulster Bank and senior management to accept a bonus because of the way its IT crisis had been handled.

Mr Noonan said he was fully aware of the negative impact that Ulster Bank’s technical problems were having on its personal and business customers throughout the country. “From my perspective, it is totally unacceptable that it has taken Ulster Bank so long to solve the technical problems and that customers of that bank have been given mixed messages on when the problems would be resolved,” he added.

Mr McGrath suggested that the Central Bank should be arranging for teams to go into the banks and test the IT systems instead of relying on what the banks were saying.

Mr Noonan said there was a limit to how far they could go in supervising IT facilities. “I do not think we need literally hundreds of public servants on standby waiting for an accident to happen and then move in once in five years or once in 10 years,” he added.