Central Bank Governor says deal with ECB 'will not' unravel

Monday 11 February 2013 11.31
Patrick Honohan expressed frustration with the pace at which banks were dealing with mortgage arrears
Patrick Honohan expressed frustration with the pace at which banks were dealing with mortgage arrears

The Governor of the Irish Central Bank has said the deal reached with the European Central Bank on the promissory notes will not unravel.

Patrick Honohan told RTÉ's The Week in Politics that the country's debt is now more sustainable than it was.

He said there are always risks but it is "within our grasp" to implement policies that will make the situation safer.

Asked about the status of the remarks made by Mario Draghi that the ECB had taken note of the Irish operation, Mr Honohan said the important point was that the ECB did not object to what was proposed by Ireland.

But he acknowledged the ECB would monitor the arrangement over the coming decades.

Responding to a newspaper report that the Government had rebuked him on Wednesday night over the failure to close the deal then, Mr Honohan said that was not the case.

He admitted though that everyone involved was "anxious and tense" that night because the liquidation was already underway.

Looking ahead to the prospects of a second banking deal on the more than €30 billion used to recapitalise the surviving banks, he said this would be a slow process and we had to be patient.

Now that the promissory notes had been dealt with the Governor said the issue of mortgage arrears would be the major priority for the Central Bank.

Mr Honohan expressed frustration with the pace at which banks were dealing with this issue.

Management at the Central Bank were "tearing" their "hair out" and he remained dissatisfied with the rate of progress made by the banks.

He signaled the Central Bank would step up the pressure but it was not appropriate for his staff to get involved on a case by case basis.