'TALKING IS ONLY SOLUTION' TO ARREARS CRISIS - With figures yesterday from the Central Bank on arrears, debt forgiveness - specifically for mortgages - is very much in the spotlight. And while just 7.2% of mortgage accounts are in arrears, the figures for restructured mortgages - at 70,000 - show the scale personal debt crisis in Ireland.
John Bourke, now retired, was formerly a director and chief financial officer at Bank of Ireland, chairman and CEO at TSB Commercial, and chairman if Irish Life & Permanent.
Mr Bourke said debt would have to be written off by the banks in the end, because people were unable to pay it.
He said he had never heard of a case where 100% of debt had been forgiven, but he said banks had to talk to people who were struggling to repay debt and come to a solution.
Mr Bourke said there were two 'huge dangers' in trying to come up with legislation on debt forgiveness. Firstly, he said, the undeserving or less deserving would 'clamber on the bandwagon'. Secondly, an imposed 'artificial' solution would delay a return to normality in the housing and banking markets.
Speaking of his experience of a similar situation in the UK in the 1990s, he said the only way to conquer the issue was to talk to thousands of people in order to find a way to keep them in their houses. He said his bank hired 400 extra people to deal with this issue at the time.
Mr Bourke said banks had to be proactive, as customers were often reluctant to come to banks. He added that it could take five to ten years to work through the issue.
***
NEWS AND CURRENCIES - Results this morning for the first six months of the year from Paddy Power show that its underlying profit before tax was up 15% to €56.8m, with very strong performances from the group's online and mobile operations, and in Australia and the UK.
On the currency markets, the euro is trading at $1.45 and 88p sterling.
