Mr. Stephen Bell:

We have always tried to be consistent in our answers to the committee in setting out the distinction between write-down and write-off. What we said, with respect to those commitments on Monday, is that in the event of a write-off at the end of a sale process, we will not chase the residual shortfall for those people who are at a sufficiently low income that they would be eligible for social housing.

In terms of our approach to the personal insolvency process, we are still of the view that the vast majority of cases can be resolved without the need for a principal write-down. Our concerns around that are that it is not a solution that could be offered to everybody. We, as an organisation that has said we wish to be known for trust, service and advocacy are deeply uncomfortable to offer solutions to some people that we cannot offer to very many people. We are in a position where the Irish real estate market is recovering from a very low base but offering somebody a write-down of principal and leaving the contractual interest rate the same simply extracts profit in a different way and creates a capital gain at the end of the process for which there is no real justification. Our preference is to regard arrears as an affordability issue, to work on reducing the monthly payment as far as we can through either extending the term of lowering the rate for a period of time which can be quite lengthy. However, for us, the consequence of writing down debt seems to create something of a moral hazard concern because, in reality, what it is doing is potentially rewarding those who borrowed most aggressively at the peak of the market as opposed to those who were more prudent in the run up to the peak. The difference between policy and practicality-----