Professor Patrick Honohan:

It is true that the ECB has started to buy bundles of mortgages. The problem is that it buys mortgages at the market price and the value of those tracker mortgages is not particularly high because they are yielding only 1% or less. The formula that the market works with and the formula under which the ECB will buy them out does not make it attractive to the banks to sell because they will be no better off or, at best, only a little bit better off. They will make their judgments on it and possibly sell. They have sold some, but only a very small number.

The Deputy has asked if there could be a big deal, something special, for the Irish banks. Officials at the Department of Finance and at the Central Bank worked with the troika, including the ECB, for months, to try to come up with some device for the tracker mortgages which would be acceptable. The best plans that we came up with would involve getting the agreement of the ECB as well as all of the national parliaments. A judgment was made that the gain to the banks was not sufficient, even with the best-designed scheme available. If someone wanted to give us a gift and just take them that would be fine but we know that is not going to happen.