Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I would like to clarify my thinking. I have stated a number of times that I do not want our economic model to revert to a boom-and-bust one. Unlimited lending of excessive mortgages is part of the fuel that fires a boom-and-bust model. Obviously, I am in favour of initiatives that obviate that danger. I have certain views about the Central Bank's guidelines, but I will make a submission through the Department of Finance to the Central Bank, which is independent, as part of the consultation process.

In principle, I am in favour of a guarantee scheme, but it would not be a reaction to the Central Bank's guidelines. Rather, it would be separate. Had there been a guarantee scheme in recent years, people would not be in mortgage difficulty now. If they were unable to pay excessive mortgages, there would have been an insurance scheme to pick up the deficit for them. However, this should not be a State system. The private sector is active enough to provide a scheme.

Models operating elsewhere suggest that between 0.6% and 1% would be added to the interest rate to give a guarantee for large mortgages. That might be a prudent control. One would get a higher mortgage but one would pay for it through an insurance scheme. Then one would have all the benefits of the security that affords. I would genuinely like to hear the views of the Deputies opposite at a meeting of the finance committee to determine whether we can arrive at the best position. Then we will go ahead and do it.

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