Mr. Padraic Kissane:

Yes. Mr. Joe Meade, the original ombudsman, wrote to the Central Bank in late 2008 and warned it of the tracker issue. That is how long ago it was. In some sectors, there is over-regulation by the Central Bank, and in others there is none. When a former Minister referred to the importance of having pillar banks in this economy, I asked him to define one. The definition to date is not of what I would regard as a pillar bank.

Interestingly, Italy, which is also in the mire economically, has very competitive mortgage rates. It took a different view from the ECB on some matters. It can still be done. I have said before that what is despicable about what has happened here is that it concerns homeowners. This is the one sector one should never have been gone near. Whatever about the global restructuring group, GRG, issues – they are here in Ireland too – and the commercial aspects, there is not the same carnage and tentacle stretch as with a home. The Central Bank came in here initially and said it did not have enough powers. The family home is protected in the Constitution. There were enough powers. The attack to which I am referring was on the family home. It is absolutely connected to renters. For the investors, most of whom were amateur, losing the properties was the same as losing a home. Many people kept their first home and went on to buy another with the increased value. They lost the rental property. They were classified as amateur investors. They paid the stamp duty, VAT and non-principal private residence tax, property taxes and water rates. The amateur investor is almost a collection device for tax for the Revenue because the level of tax being paid. We wonder why there is a housing crisis in terms of the private rental market. Eighty percent is the only amount of interest a private investor can offset on a rental property. If it is a commercial loan, it is 100%. I acknowledge there are other aspects but the banks come in here, deliberately in my view, and talk about the lost homes and this other number that does not seem to matter. It does matter, however, because most of those affected viewed the properties as their pension plans or homes, or believed they had the option to trade back to them if they sold their original home. That is all set aside.

I said a long time ago that I do not know how this State allowed the Revenue Commissioners bail out our banks, as well as the taxpayer. Most people would ask what I am talking about. Banks are currently being allowed to increase rates on tracker mortgages if capital and interest payments cannot be picked up, Bank of Ireland being the main culprit in this area. The loans were underwritten as interest-only. If there is a 20-year loan of €1 million, it is €50,000 and 0%. If there is only ten years to go, it is €100,000. There was never the affordability to pick it back up but the banks have used it as another opportunity to take the borrowers off trackers. They were given permission to do this. The interest on €1 million at a rate of 1% is €10,000. Eighty percent of that is deductible against rent. If the interest rate is moved to 2%, €16,000 is deductible against rent, so the Revenue Commissioners lose out. How did that happen?

I wrote a letter to the Central Bank on this in 2011. I said the institutions would start with investors, move to arrears and then to homeowners because the intention was to get everybody off a tracker. I wrote that to the Central Bank in 2011. It still went with what was happening. I asked how, after we had given what we gave, we were allowing the Revenue Commissioners to lose out with interest.