Paschal Donohoe (Dublin Central, Fine Gael)
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It is not clear what particular proposals the Deputy is referring to in his question; however, if the Deputy provides further information to identify the particular proposals the matter can be considered further.

In any event, the Deputy may wish to note that Irish banks substantially fund their mortgages and other loans by way of deposits raised from Irish households and firms, and that eurosystem funding forms only a relatively small share of their overall liabilities. Therefore, if a greater proportion of existing and new bank loans are to be funded by way of eurosystem funding this would reduce the need and demand for deposits as a source of bank funding. In terms of funding costs, while the eurosystem’s Targeted Longer-Term Refinancing Operations (TLTRO) programme provides funding at favourable rates to incentivise eligible lending, mortgage lending is not a type of eligible lending for this purpose (and in any event TLTRO funding is for a three year period which would not be an appropriate funding match for more long term mortgage lending purposes). More generally, it can be noted that the main refinancing operation has traditionally been the key ECB policy rate, and that this rate is currently set at 0%. As against this, it can be noted that the level of interest rates on household overnight deposits, which account for the largest share of household deposits, was only 0.03% in November 2020.

Emer Higgins (Dublin Mid West, Fine Gael)
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201. To ask the Minister for Finance if he will report on his engagement with the banks in relation to providing support to mortgage holders in receipt of the pandemic unemployment payment or the employment wage subsidy scheme who may be finding it difficult to make repayments at present; and if he will make a statement on the matter. [6594/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I appreciate the stress and uncertainty that many borrowers are facing at this difficult time, and those borrowers who are experiencing difficulty in meeting their repayments will continue to need assistance and support from their lenders. In this regard it is the clear expectation of both the Central Bank and I that lenders engage effectively and sympathetically with distressed borrowers – in line with the Code of Conduct on Mortgage Arrears, the Consumer Protection Code and regulations for lenders lending to SMEs – to deliver appropriate and sustainable solutions and facilitate as many borrowers as possible to return to repaying their debt.

The Banking and Payments Federation of Ireland (BPFI) stated last month that its members are continuing to commit significant resources to support customers impacted by COVID-19, and in particular those who are affected by the latest restrictions. Through ongoing engagement with the BPFI and lenders, the Central Bank is working to ensure that borrowers affected by COVID-19 continue to be supported through this period of unprecedented stress.

Borrowers have a suite of regulatory protections, and lenders have specific obligations to support and work with borrowers who are continuing to experience loan difficulty because of COVID-19. It is in the best long term interests of both the borrower and lender that engagement takes place in relation to a particular loan difficulty and that the most appropriate solution to the individual case is adopted as soon as possible. The options could include additional flexibility, and this could be a short term arrangement such as additional periods without payments or interest-only repayments, or if appropriate more long term arrangements.

The Central Bank has indicated to lenders that they should ensure that they have sufficient expert resources to assess individual borrower circumstances, and to offer appropriate and sustainable solutions to affected borrowers in a timely manner in line with regulatory requirements and Central Bank expectations. The Central Bank has also confirmed that there is no regulatory impediment to lenders offering payment breaks to borrowers at this time, providing they are appropriate for the individual borrower circumstance. With regard to primary dwelling mortgages, the Deputy may wish to note that it is open to lenders to put temporary arrangements in place to assist a borrower who are experiencing repayment difficulties pending the more detailed consideration and assessment of an individual mortgage case under the CCMA Mortgage Arrears Resolution Process.

I will continue to work with the Central Bank, as regulator, to ensure that the Central Bank consumer protection and other applicable frameworks will be fully available to all borrowers that will still need support.