Claim banks need bailout top-up sparks anger

Calls for bailed-out banks to be given more taxpayers’ money to top-up the €9.5bn already pumped into them to deal with the mortgage crisis have been greeted with outrage.

After former Anglo chief and ex-finance minister Alan Dukes warned that bankers needed extra State funds to cover debt forgiveness, senior figures expressed concern the money would disappear into the same “black hole” as most of the billions already advanced.

The Oireachtas finance committee is probing how the banks handle mortgage misery, and chairman Ciarán Lynch accused Mr Dukes of “going native”.

“All the evidence the committee has heard is that only a fraction of that €9.5bn has been used as intended to help with distressed mortgages,” he said.

“It would be outrageous if banks squirrelled away that €9.5bn when it is supposed to ease people’s situations. Maybe Alan Dukes has gone native and been with the banks too long.”

Fianna Fáil’s finance spokesman Michael McGrath said: “The banks have been sitting on this money to protect their balance sheets. It was meant to be used for the customers’ benefit, not to be hoarded.”

Mr Dukes had insisted debt forgiveness would be a key part of any solution to the crisis and banks could need yet more State help.

“A measure of that kind may very well require some further strengthening of the banks’ capital and that is an issue that certainly the public will need to know the full facts of before it is made,” Mr Dukes told RTÉ.

Finance Minister Michael Noonan made it clear he did not want to have to pump more money into the banks.

“The Central Bank has clearly stated that banks now have a substantial capital buffer with which to absorb losses on their mortgage portfolios and, as evidenced by the Central Bank statement last week on performance targets, the State authorities now require determined action by banks to systemically work through their mortgage book and to offer appropriate durable solutions to mortgage holders in arrears,” Mr Noonan’s spokesperson said.

Finance committee member and Labour TD Arthur Spring said he did not feel more money was needed for mortgage writedowns, but that if it was given, the burden on the taxpayer should fall over “generations” and not packaged into a short space of time.