€6bn to end mortgage crisis: Economist Kelly

Leading economist Morgan Kelly has said a €6bn bailout for struggling homeowners would end the crisis in Ireland.

UCD economist Morgan Kelly said a debt forgiveness scheme would sort out the problems for tens of thousands of people.

Morgan Kelly has been praised for forecasting the property crash in Ireland - now he is proposing ways to try fix it.

The UCD economist said a €6bn bailout for struggling homeowners would allow the indebted to walk away from loans.

He said that in such a scheme, mortgages would be reduced to a level deemed affordable while some people would be allowed to leave their properties without being pursued for outstanding debts.

Morgan Kelly said this type of scheme would solve most of the problems.

AIB has said there needed to be an industry-wide, Government-supported approach for debt forgiveness, but Bank of Ireland has effectively ruled it out.