Noonan disputes Moody's prediction on mortgages

The ratings agency Moody's has warned that a quarter of all Irish mortgage holders may default by availing of proposals in the Government's new Insolvency Bill.

The agency said the bill will be "credit-negative" for banks, meaning the legislation will cost financial institutions money.

The new law allows for the writing down of debt for people who cannot pay their mortgages.

The Government is disputing Moody's figures today with the Finance Minister Michael Noonan saying it is not possible to assess the scale of debt forgiveness until the legislation is actually passed into law.

Mr Noonan said: "It's premature for a rating agency to make any kind of call like that and I don’t know whether they said that in the text or it was in the headline.

"The Insolvency Bill is at 'detailed heads' stage and is going before a Dáil committee. It won’t be published in draft until the end of April and then it will go through.

"So nobody has the basic information to make that kind of decision at present."