Banks will have final say on debt writedowns

The Central Bank and the Government want debt writedowns to form part of the solutions to the mortgage arrears crisis, but ultimately the decision is up to the banks.

The issue of debt forgiveness or debt writedowns is the elephant in the room. Without it, it is hard to see how the mortgage arrears crisis is going to be effectively tackled.

Finance Minister Michael Noonan said debt writedowns should “form part of the mix”. Central Bank deputy governor Matthew Elderfield said that “debt relief makes sense”.