Oireachtas Joint and Select Committees

Wednesday, 21 October 2020

Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach

Engagement with Governor of the Central Bank

Photo of Pat CaseyPat Casey (Fianna Fail) | Oireachtas source

I thank the Chairman for allowing me time to speak. I was listening to the discussion from my office. I must start with the payment breaks, but I am approaching that issue from the business rather than the personal side. Every business that is affected by it has a multiplier effect on mortgages throughout the State. My colleague, Deputy Jim O'Callaghan, mentioned that the Taoiseach has indicated that we could be in this type of stop-start situation when it comes to restrictions into the future. That stop-start scenario is already happening for a number of businesses and sectors in the economy. In fact, some are now heading into their fourth lockdown, especially in the tourism sector, and some businesses have never reopened since the first lockdown was imposed.

The payment breaks were very practical and accessible for the two rounds of three months. However, at the end of the second period, the banks started to ask questions and demand more information. I am aware of a number of instances where a telephone call was made informing the business owner that he or she was no longer in a payment break situation but rather a restructuring and the bank required information on cash flows for the next six months and a lot of other details. The witnesses from the Central Bank have said on several occasions that each case must be dealt with individually. Is that really the case or can another way be found? When the first lockdown was initiated, I understand consideration was given to an across-the-board approach. Is there any way that qualifying criteria could be introduced, which would allow businesses, or even personal mortgage holders, to qualify for a payment break without having to go through an individual assessment process with their bank? It is very hard for some businesses to offer a cash flow projection when they know it could well be zero for the next six months the way things are going. I would like a response on that point from the witnesses.

I am no fan of the pillar banks but I do wonder how they are doing from a viability point of view. While they might be cash-rich, how vulnerable are they operationally and how much has the Covid crisis impacted on them in that regard? Do the witnesses envisage a time in the near future when we might see branches of pillar banks being closed down?

In regard to the July stimulus, does the Central Bank believe it was the right decision to ask businesses that were already struggling to go further into debt when that was clearly not the preferred option of those businesses? They were looking for restructuring at a lower cost that could help them to survive through the crisis.

Finally, on a totally different matter, I have an interest in housing, particularly affordable housing. We know there has been a significant increase in the amount of household savings in recent years and that this has escalated in the past six months because of the Covid-19 crisis. Do the witnesses have a breakdown of the different sectors which might shed some light on the social dynamics of this development? In particular, do they see it having an impact in terms of housing delivery next year and the availability of affordable housing?

Comments

No comments

Log in or join to post a public comment.