Arthur Spring (Kerry North-West Limerick, Labour) | Oireachtas source

The difficulty for ordinary people is that they cannot see any specific activity or anything at all tangible being done to resolve the problems with mortgages. There is the mortgage relief aspect, but for people who are trying to move up the ladder or move out of a negative equity situation, it is not tangible enough and is too slow-moving. The Department must agree a clearly identified process with the banks so that people can be confident that a solution is being brought forward. Moreover, the process must be measurable in terms of how much money will be allocated to it in the long term. Mr. Moran referred to restructuring but, as we all learned last week, no money is being allocated by the banks for resolving this matter. The delegates, however, have identified some funding with which to begin. I urge them to enforce some level of write-down and other considerations to reduce the stress people are enduring.

Mr. Moran indicated that he is looking to sell the banks. I understand the crux of the matter for the banks at the moment is simply the cost of funds. A simple principle of all economic and financial endeavour is that one should buy low and sell higher. If it costs more to purchases money than to lend it, one will be in loss-operating situation, such as Allied Irish Banks is dealing with. If the banks are to be sold, their cash-flow projections will ultimately be the decider of their value. What level of margin does the Department intend to associate with mortgages? Will there be a profit to be made in that for whoever purchases the banks given that the duration of the loans in question is up to 35 and 40 years in some cases and there is negative equity of up to 60%?