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 Header Item Banking Sector Investigations (Continued)
 Header Item Mortgage Arrears Proposals

Tuesday, 2 July 2013

Dáil Éireann Debate
Vol. 809 No. 2

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Deputy Shane Ross: Information on Shane P.N. Ross Zoom on Shane P.N. Ross I thank the Minister and I accept what he has said. My quarrel is that the Financial Regulator did not ask for them far earlier. He did not ask for them in 2008 when the crisis broke. He did not ask for them at the time he was saying all the banks were solvent. He did not look for these tapes at the time although the tapes were obviously in existence. That is an extraordinary situation and to do it under pressure from court orders is a completely different matter. His job is to regulate.

Will the Minister answer the second part of the question? What is happening now in terms of Bank of Ireland and Allied Irish Banks at a similar time and since? Are there tapes in existence of which we should be aware? I am concerned, as are many Members of the Independent group, because the scope of the inquiry is limited up to the night of the guarantee. I cannot understand why that is essential. I can understand the reason the inquiry should concentrate on the guarantee when there are other matters which should be subject to investigation as well. There was one night here which all of us can remember, that is, the night of 7 February this year, to which the Minister referred, which saw the liquidation of Anglo Irish Bank. There was confusion and chaos that night because of what was happening and there were changes going on. I would have thought it would be helpful, balanced and less political if the Government was prepared for any inquiry to examine tapes and the facts and events that occurred on that night as well.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan The question was whether tapes exist in the other banks, and I assume they do. If a customer rings a bank looking for a statement, there is usually a warning on the answering machine that tells the customer his conversation could be recorded. Anyway, what I was unaware of was that there were internal recordings of conversations between banking executives. I had thought only the calls from outside into the bank had been recorded. I inquired subsequently and I have been informed that it is always the practice to record calls in and out of the treasury department of the bank - for obvious reasons, when one thinks about it. I assume there are recordings of calls in and out of the treasury departments of the other main banks as well. The banks should be on alert, if they were not already before today, since Deputy Ross has raised the matter, that these electronic data may be required by the Oireachtas inquiry when it is put in place.

Mortgage Arrears Proposals

 65. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on the negligible number of split mortgage arrangements in place to deal with distressed borrowers at the end of March 2013; if he has sought assurances that the banks are putting in place genuinely long-term solutions as required by the mortgage arrears resolutions targets programme; and if he will make a statement on the matter.  [32226/13]

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan On 13 March last, the Central Bank, in its capacity as regulator of credit institutions, announced new measures to address the problem of mortgage arrears. These included the publication of performance targets for the six main banks in respect of the number of sustainable solutions to be proposed to mortgage borrowers. Initially, the Central Bank required the relevant lenders to propose by the end of June sustainable solutions to 20% of mortgages that were in arrears of more than 90 days. The target rises to 30% by the end of September and to 50% by the end of December 2013. The Central Bank will in due course set targets for the conclusion of sustainable solutions.

In determining whether a proposal constitutes a sustainable solution, the lender must evaluate both actual and prospective affordability of the solution by the borrower as well as the capital implications for the credit institution in terms of its prudential responsibility to minimise losses. While the Central Bank is not mandating any particular model of restructuring and while sustainable solutions will be arrived at on a case-by-case basis, it has indicated that there are some fundamental principles that must be respected in this matter. The affordability assessment of the borrower must be based on his current and prospective future servicing capacity in respect of all borrowings, and assumed prospective future increases in the debt servicing ability of the borrower must be credible and conservative.


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