Ciarán Lynch (Cork South Central, Labour) | Oireachtas source

To come back to the waterfall set of solutions and simplify matters, the most benign solution is used at the start and the solutions become more drastic and severe as the difficulties are examined. Some of the banks that appeared before us are stating that when the property is disposed of in a case of voluntary surrender, there is a legacy debt that they still perceive as secured, even though it is not. They are publicly stating they will not write down that debt. Going back to the waterfall analogy, it seems that under this approach, if a person does not have the more modest or benign option such as an interest rate reduction or an elongation of the debt, the best option, based on some of the banks' comments to us, is to go straight to bankruptcy. The implication is that they do not see scope for the ISI in their resolution processes. It is a case of either apply the waterfall set of solutions the banks will provide or go straight to bankruptcy. They were not too enamoured by the idea that a personal insolvency arrangement would be put in place.