Dr. Martha O'Hagan-Luff:

The Deputy is absolutely right. The optimal outcome would be that the banks did not have to sell any loans to vulture funds but it is a balancing act. We are ten years past the crisis and unfortunately the banks still have very high levels of non-performing loans. In terms of the social aspect of it, while there is a cohort of borrowers with 15 years left on their mortgages, there is also a cohort of SMEs that need new funding, that have to pay higher interest rates and that have limited access to credit. In terms of the country as a whole, our banking system will continue to be very vulnerable because of the high cost of holding non-performing loan portfolios. Unfortunately, we have a small, open economy which means we are vulnerable to exogenous shocks and will be vulnerable in the next economic downturn. There is a necessity here because the cost to the banks of holding these portfolios is very high. I am sure the banks wish that they did not have to take these steps but a balance must be struck between the health of the bank, the rest of the country and future borrowers and the interests of those whose loans could not return to be performing.