Pay cuts dilemma for Central Bank chief

YOU report (October 14) that the very first public comments of the newly-appointed Central Bank governor, Prof Patrick Honohan, included a “strong call” for cuts to nominal wages and that wage-earners should shake off the “fetish” of opposing wage cuts. I’m sure Prof Honohan will agree that competitiveness and its sustainability is multifaceted.

The increasing number of residential mortgage foreclosures provides the clearest possible evidence that the experience of allowing our national residential mortgage debt to reach €148bn, or almost six times the gross income of those with mortgages, is both outrageous and unsustainable.

The financial regulator took a very passive perspective with regard to this matter. He referred in his 2005 annual report to there being “much debate about high loan to value ratios”, but did little else except provide information leaflets for consumers and appeal for a level of banking prudence and providence that was never achievable.