"Tsunami of mortgage defaults" ruled out

"Tsunami of mortgage defaults" ruled out

Glas Securities

The government’s proposed personal insolvency laws are unlikely to trigger a “tsunami of mortgage defaults,” according to Dublin-based fixed-income firm Glas Securities.

The laws may make banks more active in dealing with home loan arrears, Glas said in a note today.

While Glas doesn’t believe this year’s round of bank stress tests will result in a material change” to bank capital requirements, “it is difficult to gauge the future impact of changes to insolvency legislation and the expected increased focus on arrears resolution mechanisms over the course of 2012,” it said.

The government may seek to stretch out banks’ 2013 deleveraging targets “over a longer period of time and in a more structured manner,” Glas said.

There is 1 comment for this article
  1. DAVID at 1:08 am

    Just another disaster waiting to happen. No money to back up money that doesn’t exist in the first place just written on paper.

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