Taoiseach Banks know what government wants them to do

first_imgTAOISEACH ENDA KENNY has insisted that personal insolvency legislation will help those in mortgage distress as yesterday’s comments by a senior Central Bank figure dominated Leaders’ Questions this morning.Kenny was questioned by Fianna Fáil leader Micheál Martin, Sinn Féin’s Gerry Adams and independent TD Shane Ross on the comments by the head of banking supervision at the Central Bank yesterday.Fiona Muldoon told the Irish Banking Federation conference that banks were behaving like teenagers in dealing with requests to deal with customers in mortgage arrears and said that they were waiting for a house price increase or economic recovery to solve the crisis.Kenny said that he welcomed the comments of Muldoon and others including the Secretary General of the Department of Finance, John Moran, and the Central Bank governor, Patrick Honohan, in relation to banks dealing with the mortgage crisis.He told the Dáil that the forthcoming personal insolvency legislation will be active by 1 March next year and that in the mean time it means that if “banks do not settle on a bilateral basis with their clients those clients will have a whole new course to resolve their situation through insolvency agency. He added: “That allows for debt write down.”Martin criticised the Taoiseach’s response saying that banks were not sitting down with their customers in mortgage difficulty and said that the government is adopting a “non-interventionist” approach.“The regulator is barking very loudly Taoiseach and you’re not listening to what is being said,” Martin said adding that the banks had a veto over any resolution process under the new personal insolvency legislation.‘Forewarned’Kenny insisted this was not the case and that the banks were “forewarned” of the need to sit down with their customers. He said: “If they don’t sit down well then the client is going to be given, by law, the opportunity to go through the insolvency arrangements.”Gerry Adams also criticised the government saying that the “social cohesion of communities and our society is under threat” from the government’s policies.He said: “When it comes to dealing with the big people, the golden circle, the bankers we get a long, convoluted piece of verbage.”Shane Ross said that the bankers were in “denial” and said that their actions were frustrating government policy. “The banks are not just involved in denial,” he said.They are involved in a policy of extend and pretend, according Ms Muldoon. That means denial, but it also means delay and deceit.Kenny said that he was “not satisfied with the pace of resolution” in relation to the banks beginning to function normally again but said that the Financial Regulator had asked them to submit proposals on dealing with mortgage distress.He said that “banks have been made aware of what government want them to do” and said that if the Financial Regulator requested further powers to deal with financial institutions “then further powers will be given”.Read: Kenny says AIB mortgage hike necessary to avoid further taxpayer bailoutRead: One in 5 mortgages will default by 2013last_img

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