Honohan: Strategic defaulting claims untrue

The Central Bank governor Patrick Honohan has dismissed the idea that a large swathe of people in arrears are strategic defaulters.

The term strategic defaulter was first used by AIB chief executive David Duffy, before the Oireachtas Finance Committee in August, who claimed that one in four of AIB’s mortgage arrears customers were strategic defaulters because when the bank probed individual borrowers’ circumstances they found that they could meet their mortgage payments but chose to prioritise other obligations.

“We have all heard the anecdotes about well-heeled borrowers flatly refusing to pay their mortgage instalments despite having plenty of money in a current account to do so, and still taking expensive holidays or buying new 132 reg cars.