Michael McGrath (Cork South Central, Fianna Fail)
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Question 220: To ask the Minister for Finance his views on whether the covered institutions, who have been recapitalised by the State, should be using their capital buffers to write down residential mortgage debt in certain cases; and if he will make a statement on the matter. [20108/12]

Michael Noonan (Limerick City, Fine Gael)
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The Government is acutely aware of the increasing financial stress that some households are facing in meeting their mortgage obligations. From a public policy perspective, the Government's approach to address this problem is to provide a framework that will be available to all mortgage holders experiencing genuine difficulty and not just those with mortgages from the covered banks. A number of measures are in place and are being developed in this regard. These include the Central Bank's Code of Conduct on Mortgage Arrears, the Department of Social Protection mortgage interest supplement scheme, the proposed reform of personal insolvency legislation, the implementation of "mortgage to rent", the provision, in addition to the existing MABS service, of a more specialised mortgage advisory function and the direct engagement by the regulator with all mortgage lenders on their mortgage arrears resolution strategies and on the development of options that lenders will make available to their customers who are experiencing difficulty with their mortgage. Regarding the management of capital resources by the covered institutions, while I have a significant shareholding in some banks, these banks remain independent commercial entities and decisions on the appropriate commercial handling of their mortgages and other loans, within the public policy framework on mortgage arrears set out above, and in the prudent management of their capital base, is a matter for the Boards and management of the individual institutions in the exercise of their fiduciary responsibilities subject to compliance with relevant legal, regulatory and accounting requirements.