Central Bank has powers to meaningfully address mortgage arrears: Noonan

Wednesday 15 January 2014 15.01
Michael Noonan before the Oireachtas Select Sub-Committee on Finance today
Michael Noonan before the Oireachtas Select Sub-Committee on Finance today

Finance Minister Michael Noonan has told the the Oireachtas Select Sub-Committee on Finance that the Central Bank has the power to require the banks to meaningfully address the mortgage arrears problem. 

The Minister said it would no longer be acceptable for banks to apply short term solutions where there has been a long term change in the situation of the borrower.  

Mr Noonan said the latest figures from the banks, which were published on January 9, showed an increase in the number of permanently restructured arrears, however he said it would be necessary for the banks to build on this in 2014. 

He told the committee that recent figures on the economy were encouraging and growth is expected to increase to 2% this year - up from 0.2% last year. 

Minister Noonan said exports had risen - in spite of the patent cliff in the pharmaceutical sector - and employment figures last year saw the largest increase since the third quarter of 2007. 

Fianna Fáil finance spokesman Michael McGrath said Minister Noonan had painted "a rosy picture" of the banking sector and there was a major issue outstanding issue in the liquidation of IBRC. 

There was no progress in separating bank debt from sovereign debt and that progress was far too slow on mortgage arrears, Mr McGrath added.