Kieran O'Donnell (Fine Gael) | Oireachtas source

Given the arrangements that have been provided, selling to a fund should be a measure of last resort. The banks should have within them the skill sets to sort out these loans. They should have a responsibility. They undertook irresponsible lending. The ordinary mortgage holder looks at this and sees the banks getting off the hook for their mistakes by flogging the loans on to a fund. The loans are gone and not the banks' problem any more. There is a view among many people that the banks did not do enough in terms of putting arrangements in place for hard-pressed mortgage holders.

In some jurisdictions, instead of selling mortgages to funds, they are extended to 30 or 40 years and measures are put in place to keep people in their homes and restructure the banks' balance sheets. People have attachments to their respective institutions. They are Irish based. The witnesses might point out that their shareholdings change, but there is that degree of familiarity.

This is in the Central Bank's domain. Let the banks take responsibility for their reckless lending by putting in place alternative, longer term arrangements. Many of the people who approach us ended up with mortgages that they should never have got. Rules have been introduced and people say that they find some elements draconian. The rules are not perfect, but there are elements that are working. People believe that selling to funds is effectively a get-out clause for the reckless lending of individual banks so that they do not have to take responsibility for giving out loans that they should never have supplied. The loans are being sold on to a fund. Ordinary people are very nervous that their loans could be sold on time and again and that they would end up having no idea who they were dealing with. Does Mr. Sibley understand? Reverting to the Chairman's original point, how do we improve the lot of the person who is hard pressed and ensure that his or her loan is dealt with by the institution that made the loan to him or her on day 1 and that it takes responsibility for its actions? The borrower is required to fulfil his or her requirements under the terms of the loan. We are coming to a point where the banks are getting their second wind but many of those people whom we are dealing with are not. Does Mr. Sibley understand my point? Has the Central Bank examined ways of restructuring loans into having much longer durations and encouraging the banks to come up with more imaginative approaches instead of just selling loans on to funds?