‘Governor urging banks to repossess’

TDs have criticised Central Bank governor Patrick Honohan after they said he signalled that he wanted repossessions speeded-up.

People Before Profit TD Richard Boyd Barrett said the Central Bank should be pushing debt forgiveness not increased repossessions.

“Prof Honohan seemed to implicitly state that the banks needed to bring about more repossessions to deal with the situation.

“The governor appears to be urging the banks to repossess. I think that is completely the wrong approach. What we need is debt writedown and debt forgiveness, and the Central Bank should be imposing solutions which keep people in their homes,” he said.

The comments came after Prof Honohan appeared before the Oireachtas finance committee and stated the way banks were dealing with distressed mortgages was “damagingly slow”.

He said the “delays and uncertainties surrounding the resolution of non-performing loans” remained an “acute problem”.

The governor was also accused of “learning nothing from the crash” when he suggested greater competition would help customers.

On the controversy surrounding the failure of banks to pass on interest rate cuts to customers with variable rate mortgages, he said there was justification for some of the discrepancy, but banks should act to cut the burden on borrowers.

He urged against Government intervention. “I would welcome a reduction in the SVR [standard variable rate] in current circumstances as a benefit to the economy at large,” he said.

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