Professor Patrick Honohan:

I understand the Government is considering improvements in that regard. MABS could require more financing. The point about the Financial Services Ombudsman is an issue for that office.

Senator Hayden is absolutely right that the process is not good. One point that is sometimes made is that the more process we put in, the longer it takes to get a solution. I am not sure that is a good argument. We had hoped that by defining targets for the banks in terms of what we are calling sustainable solutions - I realise that heading in the table includes letters, but that is not where it will end up - we would be tying their hands in a way that forces them to do something that actually is good for the borrower when combined with the code of conduct on mortgage arrears. That does not give a level playing field, but it does constrain the banks relative to what they might otherwise do. They might, for example, have preferred to get out quickly in many cases or do nothing at all. The latter is the more likely because in our experience of the banks, they did nothing for years and years. We have tried to move down the route towards sustainable solutions. As part of that, we have considered the idea of trying to provide a better level of information for customers. The personal insolvency arrangement, PIA, process is part of that, with the personal insolvency practitioners helping borrowers to put together a package that can deal not just with one creditor, but with many. While the process is not satisfactory, we should not rush off in every direction. Most of these issues are not specifically matters for the Central Bank, but we have tried to work with the banks that are under our control. I hear what the Senator is saying and take it on board.

On the issue of tenancies and so on, the Senator has raised it with me before and I looked into it. She knows the situation perfectly, namely, that it is an entirely separate piece of regulation. All of it applies to banks, but in respect of their compliance with the law rather through any particular code the Central Bank establishes. The consumer protection code is relevant to the extent that the banks themselves are dealing with tenants. In many cases, however, they are dealing with the rent receiver and not a regulated entity, so it is outside the remit of-----