Professor Patrick Honohan:

The mortgage arrears situation has continued, more or less, as we expected. In 2011, we started our mortgage arrears resolution system. The Central Bank started to press the banks to get to grips with their systems which were not really fit for purpose. After the legislation changing the Dunne judgment, the change in our code of conduct on mortgage arrears, our targets regime and our definitions of sustainability, it would not be fair to say the banks' systems are not fit for purpose. They may not be best in class but they are fit for purpose. Their policies are more coherent. They may not be exactly aligned with my views but one could not quarrel with them. Importantly, they have delivered on the targets.

Some 90% or so of the arrears cases are in a proposed state and 40% to 50% of the arrears cases are in a concluded state which, in many cases, involves court cases. We are not happy with the percentages going into the court process. We hope more will reach a situation where the indebted person and the bank talk to each other, exchange information and a viable restructure is concluded and that it does not go to a repossession of the property when that does not happen. It is the right solution in some cases but the percentage going to court is too high. We have said a million times that banks should work harder but borrowers should not be afraid to open the letters, get advice from MABS and engage because a better solution is available.

In regard to the cases which have been through this process since 2013, some 88% to 89% are meeting the terms of the restructure, which is much better than the earlier wave in 2011 and 2012, which we published recently. The percentage then was much lower. People were falling back into arrears again. It is early days and I am not saying the 88% will continue and that five years time, it will still be 88%. It will not be and some of them will fall by the wayside and will not be able to meet it. That is why I would be inclined to encourage the banks to be more liberal in their restructures so that fewer of them come back to the table.