Tom Fleming (Kerry South, Independent)
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To ask the Minister for Finance the position regarding the €7.5 billion that was made available to the banks last year to deal with distressed mortgages; the reason it has not been passed on to borrowers; and if he will make a statement on the matter. [45918/12]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, the Irish banks were required to raise €24.0bn in capital following the 2011 Prudential Capital Assessment Review (PCAR) in order to remain above a minimum capital target of 10.5% Core Tier 1 in the base scenario and 6% Core Tier 1 in the stress Scenario. The Central Bank made its decision on required recapitalisation based on loan-loss projections along with further calculations concerning the prospective income, expenditure, and deleveraging plans of the banks as outlined in the 2011 Financial Measures Programme (FMP) Report. This report was published by the Central Bank of Ireland on 31 March 2011 and is available at

http://www.centralbank.ie/regulation/industry-sectors/credit-institutions/pages/financialmeasuresprogramme.aspx

In order to arrive at a stressed loan-loss estimate that was fully credible to the international markets, the Central Bank engaged BlackRock Solutions, a specialist in analysing potential loan losses under stressed conditions. However I must again reiterate that the stress test scenarios were designed to represent extreme but plausible events, but they were not forecasts.

In terms of mortgages, the Central Bank has informed me that the following projected losses for the period 2011-2013 were used for capital determination purposes in the FMP exercise.

The Government is aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations and it is committed to advancing appropriate measures to assist those mortgage holders who are experiencing real and genuine difficulty. In this regard, the Government is now actively implementing the main recommendations contained in the report of the Inter-Departmental Working Group on Mortgage Arrears. Some of the new initiatives to assist troubled mortgage customers are detailed below:

- The Personal Insolvency Bill was approved by Government and published last June and the Committee stage of the Bill was passed by the Dáil last month;

- The Minister for Housing and Planning has formally launched the “mortgage to rent” scheme on a nationwide basis;

- Lenders have now provided details to the Central Bank on their proposed forbearance and loan modification options and some forbearance measures have been introduced on a pilot basis with a further roll out later in the year;

- Also an extensive independent mortgage advice framework has now been put in place by the Minister of Social Protection comprising (i) an enhanced website

www.keepingyourhome.ie (ii) a Mortgage Arrears information helpline, and (iii) the provision of free independent ‘one-to-one’ professional financial advice to borrowers when considering a long term forbearance/resolution offer from their lender. The list of accountants providing this service is located on the www.keepingyourhome.ie website.

The Government remains very committed to progressing these measures, which are in addition to existing supports such as the protections afforded by the Central Bank Code of Conduct on Mortgage Arrears, to assist genuine mortgage holders in difficulty and the Government sub-committee on mortgage arrears, which is chaired by An Taoiseach, continues to meet to ensure this receives priority attention across relevant Departments and agencies.