Bankers have declined an opportunity to reply to an attack by Finance Minister Bob Richards on their lending and interest policies as a drag on Bermuda’s recovery from recession.

Bermuda Bankers’ Association chief Brendan McDonagh, the chairman and CEO of the Bank of Butterfield, refused to comment on Mr Richards’ Budget speech broadside on the banks, when he said they were “at odds with Bermuda’s national economic interests.”

But he added: “Minister Richards’ comments in the Budget statement have been noted and, as is the case with all stakeholders’ feedback to the Association, they will be reviewed as a matter of course.”

He was speaking after Mr Richards pledged last Friday that Government would be pushing the banks to change course on their get-tough lending policy, combined with “infinitesimally low” interest rates and “excessively wide” margins between deposits and loans.

Mr Richards added that the banks’ policies were damaging the economy — while they continued to lay off staff.

Mr McDonagh said: “The Bermuda Bankers’ Association is committed to being a leading contributor in the development of public policy on the financial services sector and to ensuring that the legal and regulatory framework governing financial services operates in an efficient, effective and fair manner.

“As such, the Bermuda Bankers’ Association, in its usual, ongoing operations, is in regular dialogue with both the Government and trade organisations about various aspects of the provision of financial services in Bermuda.”

Mr Richards highlighted that the banking sector provided “ultra-easy” credit during the boom years — but resorted to “debilitating, ultra-cautious lending during economic weakness.”

Mr Richards said on Friday: “This is, on multiple levels, contradictory banking policy at a time when we need to expand this economy

“We have stated repeatedly that in order for Bermuda to move forward, all oars must be pulling in the same direction.”

But he added: “Attaining such forward momentum is much more difficult to achieve when such an important economic driver as the banking sector is pulling in the wrong direction.”

Budget figures showed that at their peak in 2009 — the year the recession hit Bermuda — banks lent more than $6.3 billion locally.

But that figure had shrunk by nearly $1 billion by the third quarter of last year.

Mr Richards’s Budget statement noted: “The Government is in discussions with the Bermuda Bankers’ Association about these matters to find a way to have everyone pulling in the same direction.”