Fidelma Healy Eames (Fine Gael)

I thank Senator D'Arcy for sharing his time and welcome the Minister of State to the House. I have been out campaigning on the stability treaty for the past four days and in the course of my campaigning the strong feeling I have picked up is that homeowners and families see the stability treaty as a means of reining in national budgets and that this is a good thing. However, the question being raised with me is how the banks and the financial system can be reined in so that they never again lend to the same ridiculous level as they did to create this crisis. What reform of the financial system is planned to prevent a repeat recession of this nature, which we know was fuelled by the banks?

Another concern raised is one on which I spoke in the past when Fine Gael was in opposition, but the issue has come to the fore during my campaign. People are deeply worried about the potential loss of their homes. The threat of this changes everything so that nothing else is of concern. It is bringing serious stress on families so that they are unable to enjoy life. Although I say this reluctantly, we are moving too slowly on this. Solutions are being brought forward too slowly. However, I am delighted to learn the Central Bank is giving mortgage lenders until end-May to categorise arrears cases and propose solutions for each category. It is high time this was done and it would be good if the Government could give us a date by when these solutions will come about.

I note the banks intend to come up with products by the end of October. My concern in this regard is that the products must be honest attempts to solve the issues rather than a sneaky way to sneak money from already hard pressed couples and individuals. Terms and conditions often find another way to add costs. Given the current difficulties, can the Minister of State do anything to expedite the proposed products? Will these products only be open to people in difficulty? Will they be open to everybody to allow restructuring? Will intergenerational mortgages be considered? The split mortgage proposal has huge merit. Are banks implementing this already? Are they looking at what couples can afford to pay, allowing them to pay back what they can and parking the rest for now? I suggest they should not park the rest without allowing simple interest accrue. Some simple interest should accrue on the parked amount so that it does not become a bad debt on the banks' books. This is important, because otherwise we will hear in a few years that there is so much bad debt on the banks' books.

We should consider how situations like ours have been managed in other countries. In Iceland, households were helped by an agreement between the Government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110% of home values. I agree there should not be an incentive to default, but we need forgiveness at particular levels. Is there a fair sliding scale of forgiveness that could be considered?

I will finish on the important question of the promissory notes. I know the Minister for Finance, Deputy Noonan, is working hard on this. If we get a deal on these and we get a write-down of the banking debt of approximately €40 billion, will we be able to offer some level of debt forgiveness to homeowners? We are talking here about approximately €10 billion, in the case of the people who bought during the peak from 2006 to 2008 and paid huge stamp duty. I wonder whether in that circumstance something will be considered. I look forward to the Minister of State's reply.