BUSINESS OPINION: BANKERS REGULARLY speak of the prospect of the "green shoots" of recovery appearing in the global financial markets, but few have broken ground yet.
International bank losses and writedowns in asset values are approaching $500 billion and the ticker shows no sign of slowing.
At home, proposals to loosen tightened lending in the €140 billion Irish mortgage market and breathe life into the ailing property sector have been tentatively suggested by bankers and builders - the two groups most under pressure in the rapidly deteriorating downturn.
The ideas in circulation - and there appear to be a number around - would require some Government initiative and the State planting seeds in the hope of growing those much-needed shoots.
One idea involving the State buying packages of mortgages from the banks to generate cash for new borrowers, similar to Government-supported schemes in the US and Germany, appears to have died even before it was shaped into a formal proposal.
The suggestion was given short shrift last month by Taoiseach Brian Cowen and the head of the National Treasury Management Agency, which would most likely be the State body to run the scheme.
Multibillion-dollar losses posted last week by US government- sponsored mortgage companies Fannie Mae and Freddie Mac will not help the argument for a similar system to be created in Ireland.
Some bankers have indicated that the scheme, which they say would only create several weeks' worth of mortgages, had been turned into a political issue as it had been endorsed by the construction industry and that it would be perceived as some form of State bail-out for the banks and builders if approved.
Other ideas being bandied about include the State forgoing some of the VAT on new house purchases, which could spark some activity in the property market and create crucial cash flow for struggling developers.
The perennial debate over whether to freeze stamp duty for first-time buyers has also arisen as an idea that the Government will likely have to consider in the run-up to the next budget if the property market doesn't show signs of improving.
It emerged last week that, in a bid to kick-start the flagging UK housing market, British prime minister Gordon Brown was considering postponing stamp duty on the purchase of lower-value homes and creating a tax-free savings account to help first-time buyers build up deposits for houses.
Talk of future changes was criticised by sections of the UK property industry, which said they could create a dip in activity until the measures were formally announced in the autumn.
Brian Cowen will know from the experience of drafting budgets at the Department of Finance that if stamp duty reform is to be the solution, the Government must move quickly to avoid prolonging the property slump, as prospective buyers will delay their purchases if they anticipate some benefit in the December budget.
Another proposal, although not directly intended as a stimulant for the property market, seems to have generated interest within Government circles. It would involve the State providing some first-time buyers with an equity loan of between 20 and 30 per cent of the value of the property, which would be repaid like a normal loan or if the property was sold. The proposal, which was contained in a Government- commissioned report by the Affordable Homes Partnership, would help prospective buyers who have been priced out of the market in recent months as the credit crunch has forced lenders to demand up to 20 per cent of the purchase price as a deposit.
This would undoubtedly be a tonic for the first-time buyer sector - a booming area of the property market at its peak, but where the value of new mortgages dropped almost 40 per cent in the first three months of the year. Sales in this end of the market are likely to have fallen further since April as banks tightened lending.
Since taking over as Minister for Finance in May, Brian Lenihan has met senior bankers and canvassed their opinions on how they might reverse the economic downturn. Some believe he is storing ideas away with a view to taking one or two off the shelf to inform his budget changes.
In the meantime, more and more banks have been reporting that loans, particularly to the housebuilding sector, have deteriorated significantly in recent months due to hard times, and they are having to support some developer customers by postponing interest payments and renegotiating loans.
The next bank to report an update to the market is Anglo Irish Bank, which has a heavy exposure to the property development and construction sector. The bank's trading statement on Wednesday will be read closely for signs of rising risky loans and bad debts.
Eugene Sheehy, chief executive of the State's biggest bank AIB, last month dismissed any need for Government support, saying that "the best way for this to cure itself is for the market disciplines to be maintained" and for property prices to fall.
Certainly, any State support for banks or builders would confirm the belief internationally that the Irish economy is facing a far more severe downturn than domestic commentators first expected, sparking cries from abroad of "we told you so".
By supporting struggling developers, banks are likely to protect the market from the collapse of any of the significant players. However, such a failure could help signal the bottom of the cycle and attract cash-rich bargain hunters into the market.
Financial commentators have described the collapse and rescue of US investment bank Bear Stearns in March as something of a turning point in the markets. However the fear - and it is a big concern - is that the failure of one major property developer could lead to many.
By "rolling" with the problem, banks are playing it safe until the market improves.
This week in The Irish Times, leading business figures suggest ways of reviving the economy, starting today with entrepreneur Seán Quinn. Brian Lenihan is likely to be taking notes as Government seeds will need to be sown to encourage economic growth again, regardless of how it is perceived internationally.
