Professor Philip Lane:

The basic limitation is the typical legislative restriction on retrospection. To expand, there was a significant shift in 2013. We now have the power to impose redress in respect of any damage or episodes that occurred after August 2013. We can insist that the banks offer a redress scheme in these types of cases. As most of the damage involved in the tracker mortgage examination occurred before 2013, we have to operate under the legislation which was in effect before 2013. Any new powers for the future would not help us deal with the scenario which existed before 2013. We had the powers to compel the banks to produce the information contained in the second stage reports but, in terms of consequences and offering redress and compensation payments to the debtors, we have to use moral suasion and point out to the banks that they are better off putting forward these schemes on a voluntary basis. Otherwise, they will be dealing with this issue for a long time through the ombudsman and the courts system.

If they are consumer-focused, they should recognise that it is much better to put forward a decent scheme now, rather than forcing people to go to the ombudsman and the courts. The redress and compensation schemes currently being introduced are not being put in place under any powers of compulsion the Central Bank has. We are essentially using our regulatory powers to point out that we have this information and that we can tell that there has been significant loss to consumers. We are pointing out that the banks should not be asking consumers to be going forward wholesale to the ombudsman and the courts, but rather that they should be voluntarily putting schemes in place. We are also telling them what we expect from those schemes.

I will ask Ms Rowland to add to that.