Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I welcome Professor Honohan. In his opening paragraphs he referred to the Central Bank's strategic plan and supporting and restoring a fully functioning banking system and ensuring risks to stability and consumer protection are identified. I wish to discuss a particular risk. In March the Government, through the Revenue Commissioners, will give indicative valuations of all homes in the country to home owners. The actual value will be confirmed by the homeowner shortly thereafter and in the normal course this will be accepted by the State. The valuation of all homes in the country will have major significance for all banks with mortgages and other charges on properties. It is clear that in many cases the new process may result in many houses being valued at substantially less than the figure at which the banks valued them and the associated loans. This will have significant implications for the balance sheets of banks. What discussions has Professor Honohan had with the Government, the Department of Finance, the Revenue Commissioners and the banks to prepare for this? This will be the first time we have a crystallisation of the values of the residential property market in Ireland. When property loans were transferred to NAMA the value of these loans was crystallised which resulted in a write-down of 58% of the property loan portfolio. What write-down does Professor Honohan assume will happen? What does he expect will happen to house values and the implications for this on the balance sheets of the banks?