Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

That is not a solution for the vast majority of people, and the Minister knows that. If one is bankrupt, one loses one's house. That is not a solution for the approximately 186,000 people who are in mortgage distress. The problem is that while it is good that the Central Bank is looking at the banks and will study what they do, the banks have basically refused to listen to the Minister, other Ministers and the Central Bank for the last two years. They have not dealt with this crisis. The only thing the Central Bank can do, if it finds after studying their documents that the banks have not done this, is make them make provisions against the loans, and the State-owned banks have already been recapitalised to make those provisions. I will continue to return to this issue but, hand on heart, I hope this does resolve it, because people need a little light at the end of the tunnel.

I was struck by something Matthew Elderfield said at the press conference when the Minister launched these measures. My understanding of what he said was that for those who will enter restructuring, the bank will look at the long-term gain for all the different options that are available. However, where the value that the bank can get back in the restructuring is less than the current value of the home, the bank will look at repossessing the home. That is a very dangerous situation. Basically, Matthew Elderfield referred to what is more beneficial for the bank in the long term. If somebody has a mortgage of €400,000 and the current market value of the house is €200,000, and the bank comes to the realisation that the most it can get back from the individual is €180,000 with all the different restructuring instruments it has available, it is beneficial for the bank to repossess because it can make €20,000 profit. However, that is not something we should countenance. I was alarmed when Matthew Elderfield said that. Will the Minister comment on that? Does he believe that should be the case or that banks could follow that approach?

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