The new pilot scheme by the Irish Central Bank, specifying the claim priority of residential mortgage debt and unsecured consumer debt, is worth a brief mention here. It alters the features of Irish consumer debt contracts in terms of security and seniority. I have no legal training and I am unsure of my interpretation, so comments are welcome.
Author: Gregory Connor
The Eurozone banking system is not working properly due to fragmentation between core and peripheral banking systems. In a recent speech, the president of the ECB, Mario Draghi, has acknowledged this, but argues that fixing this problem is someone else’s responsibility. The ECB has the tools to address this crucial flaw in the Eurozone system, and over the medium term horizon there is no other Eurozone institution that can. The ECB should use the tools available to fix this market fragmentation, in particular, the ECB should engage in aggressive, long-term asset refinancing on sufficiently generous terms to encourage bank participation.
Co-organizer John Cotter and I are pleased to announce a superb line-up of speakers for the FMC2 half-day conference on bank resolutions mechanisms on Thursday, May 23rd at the Irish Institute of Bankers. To sign up for attendance at the conference, please contact Irene.ward@ucd.ie. Admission is free.
Today the Irish government and Central Bank together announced a new set of plans to tackle the mortgage arrears crisis. The new plan reverses two policy decisions from the recent past that are now acknowledged to be flawed: the 2009 Land Conveyancing Act, and the Financial Regulator’s 2011 Code of Conduct on Mortgage Arrears. The plan also imposes ambitious targets on all Irish domestic banks, first, to offer each mortgage holder in arrears a specific proposal for resolving their arrears problem, and second (during 2014) to ensure that a majority of these individual plans are implemented or suitably modified.
The targets seem fairly aggressive, with over 55,000 individual arrears resolution plans to be offered by December of this year. It is not clear when the new process can begin since the legislative changes to the 2009 Land Conveyancing Act may not be ready for several months (today they were promised to be completed by the summer recess of the Dail).
Key documents:
Irish Central Bank press announcement:
Mortgage arrears resolution targets:
Consultation on changes to the Code of Conduct on Mortgage Arrears: