Will Muldoon's speech rock the banks into action?

Will Muldoon's speech rock the banks into action?

The Central Bank has encouraged lenders to be more proactive in dealing with their problems

Fiona Muldoon’s speech earlier this week certainly rocked our country’s banks.

The Director of Credit Institutions and Insurance Supervision for the Central Bank castigated our lending institutions for their failure to deal with the country’s mortgage crisis.

Her straight talking was refreshing though and shows the Central Bank has changed for the better after a difficult few years.

The location of her speech was apt, the Irish Banking Federation conference. Here she was taking on the bankers in a room full of them.

It is this sort of attitude that is needed though to turn around a sector that now has 167,000 loans, with a total of €35 billion, in arrears.

There is little doubt that the banks were a large cause of creating the problem in which the country currently finds itself.

Over four years on from the State guarantee of our banks though and Ms Muldoon feels there is still a culture of leadership missing.

While her comments might not have went down well with bankers, she was only saying what most members of the public think on a daily basis.

It infuriates most common people that banks and developers are bailed out at a time when they and their friends, neighbours and families are struggling simply to put food on their tables each day.

The Irish Times give a brilliant account today of the problems that many people find themselves in.

The reality is that there a large number of people in this country who have mortgages that, short of winning the lottery, have no hope of every being repaid.

While these individuals must take responsibility for borrowing so much in the first place, equally the banks must shoulder a portion of the blame for taking too big a gamble on the loan.

Below this group there are hundreds of thousands of homeowners in negative equity but still making ends meet. That is fine up to a point but if these people need to move home for either work or family purposes, they are effectively hamstrung.

For any economy to run effectively, people need to have the option of moving.

Equally, younger first time buyers are being denied access to credit by banks who are afraid of getting burnt again by giving out loans that will ultimately end up costing them.

That too, is wrong as is the lack of credit being provided to SMEs to provide jobs throughout the country.

This week’s speech by Fiona Muldoon was refreshing. Hopefully it was just the start of the Central Bank flexing its might to ensure that we sort out our banking mess because until that happens, the country will never properly recover from the situation it has found itself in for the past few years.

Let us know your thoughts on the banks and what you thought of Ms Muldoon’s speech in our comment section below.

There are 15 comments for this article
  1. Will at 6:58 am

    Fat cats got cleansed of their responsibilitys now its time the ordinary guy got his debts wiped off the record.

  2. Michael at 4:01 am

    This is rubbish. While the banks loaned irresponsibly, it is the individual who applied for the mortgage that is mostly at fault here. No one, from any bank, ever took out a gun and put it to the head of a prospoective mortgage holder and said “sign here”.

    It is the greed and stupidity of the people of Ireland that is at fault. Now everyone wants to know “Where’s my Nama?”.

    Well, my taxes are going to pay for bailed out banks and people who got themselves in over their head. I never bought foolishly nor specualted on the Irish property marekt – so where’s my Nama?

    People need to learn to save again, live with and be responsible for past actions, and pay off their debts.

    We can follow Iceland, but in Iceland people pay their debts.

    Michael

  3. Evelyn at 11:49 am

    It seems Fiona Muldoon does not yet realise that greed always prevails and also there is a mentality in this country that we can cross the line with impunity and that is how we actually got ourselves into this mess in the first place but then – how do you fix it – by having a more equal society perhaps by digging down and getting to the root core of the problem and punishing those responsible severely and tackling the attitude in this country that “as long as you’re not caught it’s grand”.

    The bottom line – kill the greed – have a more equal society.

  4. jenko at 8:55 pm

    It infuriates me to hear commentators talk of rescueing people in arrears with their mortgages. What about the couple on 70K who are struggling to make ends meet and paying 20K a year for a celtic tiger mortgage foisted on them by a bank. Should they give up one job , go into arrears or default so they can get debt forgiveness or move house. Everyone who has a mortgage in negative equity should have debt forgiveness so that they can return to normality and repay a viable mortgage. Young people paid the going rate for a house and took the mortgage available and now are being punished for a situation that was the making of the banks. The banks provided the loans that fuelled houses prices in the first instance and they must take responsibility.

  5. michael long at 7:34 pm

    the banks got billions of euros to bail them out they should write off all our personal debt they cant get paid twice

  6. James at 7:01 pm

    High home prices benefit nobody. In Ireland far too high a percentage of income is spent on housing.

    A lot of defaulting homeowners are sitting tight waiting for the big debt forgiveness.
    The best way to get prices down would be to throw delinquent borrowers
    out and force the banks to immediately sell the properties on the market.
    The borrowers would then be able to rent the same homes at a fraction
    of the price.

    “Keeping people in their homes” is harmful as it artificially supports home
    prices. We need home prices to be 50% lower. People would then be able
    to pay rent with lower wage jobs.

  7. harry at 5:50 pm

    just to comply with the current prices for houses it would be fair if the banks write off 45-50% of mortgages left to be repaid. Otherwise, a lot of houses will be abandoned and the banks get nothing in the end.

  8. damiangibney at 5:19 pm

    its about time ,but there game is up see http://www.blankofireland .and down load your own free e book ,this will tell you what your bank did, they riped us all off and are still at it ..its time to fight back stand up for your self dont let them rob your home you can stop them. read this and see

  9. Paddy at 5:14 pm

    The bankers don’t care; 90% have retained their jobs, and the tax payer has picked up the tab for their criminal borrowing and lending practices. Within 10-years most if not all of our senior world-class idiot bankers will be retired and living in a villa on a golf course with a friendly doctor next door ready to diagnose “stress induced memory loss” at the first mention of the words “banking fraud trial”. Meanwhile back in Ireland, the taxpayer continues to be screwed to pay the super pensions of the early-retired bankers and their department of finance and central bank golfing and drinking buddies. Do you see anyone doing anything to change this picture? I don’t because all the little piggy’s have their noses in the taxpayer funded trough, and none want to loose-out on free lunchs.

  10. Paddy Purell at 4:42 pm

    Must admit I found Muldoon’s speech very interesting and more hopeful than the fellow contributors seem to have.
    Now if the central bank keeps up it’s new approach we might be getting somewhere

  11. owen at 4:02 pm

    Why are banks making the same mistakes. They only see what they want to. If a persons financial position is improving ( though not necessarily in the light of one loan) then surely it is in the benefit of a borrower and the lender. When they should be concerned is when it is neither improving and there is no prospect of improvement, but, unfortunately the banks wear blinkers. Further they have no experience of how to handle these new situations, and have been advised to get in experienced people. THey MUST take off the blinkers. Often people with several loans will direct excess income to clearing one loan, to free up funds to pay off the other loan. Overall the position of the borrower improves and ergo so does the lenders position. Borrowing is all about trust and not computers and accounting. Bankers should assess the honesty of the borrower and his OVERALL history, not limit to a narrow sphere and what policy and computers tell them. People referred to the credit history bureaux does not necessarily mean they are unreliable, just that they had some difficulty in the past. Most liquidations are forced upon people unnecessarily as this is in the interests of the liquidators etc. Likewise with personal problems. Pressing people into the dirt achieves nothing positive.
    In negotiations with banks they always say they cannot do a deal. But they do and do not want it to be made public and often require a gagging clause.

  12. Stephen at 4:00 pm

    The IT article shows the true scope of the problem. Can’t afford to pay their current mortgage but “I want to move on to something bigger”. Seriously.

    Banks need to start enforcing some basic maths to anyone thinking of getting a mortgage.

  13. anthony jenkins at 3:53 pm

    your so right follow iceland they did the right thing, get rid of the wasters.

  14. Conor O’Sullivan at 3:29 pm

    Yes lets follow Iceland, its the only way to go!!

  15. lizzie at 2:29 pm

    Do what Iceland did , fire the government , jail the bankers and default on the banksters gambling debts , this is the only way Ireland will ever recover !!

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