John Deasy (Waterford, Fine Gael)
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Question 160: To ask the Minister for Finance if he will detail and itemise all debt that has been forgiven by State controlled, State owned, State part-owned financial institutions in the past two years; and if he can inform Dáil Éireann of the policy of these institutions as it pertains to the forgiveness of all debt held by individuals, companies or otherwise. [3923/12]

Michael Noonan (Limerick City, Fine Gael)
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There is no standard approach by financial institutions which involves debt forgiveness. Where debt forgiveness has occurred the particular circumstances are stated to be exceptional and each such situation is addressed on an individual basis. In general terms the approach, across financial institutions is to proactively work with the customer to find a solution which is practical for both and within the contractual arrangements between the borrower and the lender.

There are a range of strategies available to allow institutions to work constructively with customers in loan forbearance/restructuring. These include extending the loan repayment period term, agreeing interest only periods, etc. These strategies are aligned with the relevant codes of conduct e.g. the Code of Conduct on Mortgage Arrears issued by the Central Bank. Financial institutions write off debt in their accounts annually. However this is not a proxy for debt forgiveness. It represents a point in time when, having pursued all avenues of recovery, there is no real prospect of recovery of the debt. The debt still remains collectable but for accounting purposes is not held in the institutions balance sheet.

I have been informed by the institutions that information in relation to debt that has been forgiven cannot be provided for a number of reasons including:

The information has not been publically disclosed

Extraction of the information as requested would be very difficult to verify

The information is commercially sensitive

Any such information, if disclosed, would also need to be released to the market in light of Stock Exchange Obligations

In relation to mortgage lending the Deputy will be aware the Mortgage Arrears Expert Group, during its period of research, could not identify any arrangements internationally that could be characterised as mortgage debt forgiveness schemes, with the exception of parts of the US where non-recourse mortgage lending applies. The group did not recommend a formal debt forgiveness scheme having regard to the broad range of policy considerations which are outlined in the main body of the report. The Central bank is currently reviewing lenders mortgage resolution strategies and, as part of the "Keane Report" there is no blanket debt forgiveness planned.