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State Banking Sector Regulation

Dáil Éireann Debate, Thursday - 15 November 2012

Thursday, 15 November 2012

Questions (48)

Michael McGrath

Question:

48. Deputy Michael McGrath asked the Minister for Finance the discussions he has had with banks to address the comments of the Central Bank director of credit institutions and insurance supervision that the banks lacked the appropriate culture and skill set to deal with the mortgage crisis; and if he will make a statement on the matter. [50481/12]

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Written answers

My Department maintains frequent contact with banks, in particular the covered institutions, on a wide range of issues, including the issue of mortgage arrears. However, the Central Bank, in the exercise of its statutory role as independent regulator and supervisor of credit institutions, has continuous involvement with all the banks from both prudential and consumer protection perspectives. In that context, the points made by the Central Bank Director of Credit Institutions and Insurance Supervision in her speech at the Irish Banking Federation 2012 National Conference warrant particular attention. In particular, she noted shortcomings on the part of banks in their capacity, and to some extent willingness, to fully address the mortgage arrears problem, although it should also be noted that she also indicated certain areas of progress. The Central Bank has over the past year had intensive engagement with all mortgage lenders on the development of mortgage arrears resolution strategies. As indicated by the Director, the Central Bank has led on this issue and I support the Bank in this leadership role as it continues to actively engage with banks on this process and in particular now that the process has reached implementation and roll out phase. This has inevitably involved the upskilling of staff to deal with the mortgage arrears issue and this area will, I expect, continue to attract close scrutiny from the Central Bank.

I also expect lenders, many of which now have also had significant leadership change, to respond to the challenge made by the Director and to work with the Central Bank in the roll out of measures to assist their customers who are experiencing genuine and real mortgage distress.

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