Roundtable: Distressed Debt

When 15 January 2021 9:00 AM
Where Web

Distressed Debt Stakeholder Roundtable, Friday 15 January 2021

On 15 January 2021, the Central Bank of Ireland hosted two roundtable discussions with key stakeholders focused on personal and business distressed debt, arising from the pandemic and existing long term distress. The Deputy Governor for Prudential Regulation and Director General for Financial Conduct in the Central Bank hosted both sessions along with representatives from a wide range of stakeholder groups working with people and businesses experiencing distressed debt, as well as academic researchers in the area and industry representative organisations.

The objectives of the roundtables included discussing the problems and approach to resolving distressed debt, based on the experience of borrowers and stakeholder representatives.   

Participants discussed their experiences and views of the effectiveness of the supports and solutions in place for distressed borrowers. They provided insights and suggestions for how to address the key issues and challenges that borrowers with distressed debt were experiencing. A summary of the issues discussed include:

  • the continuing impact of COVID-19 on all borrowers and other vulnerable areas of society;
  • the recovery will not be smooth or straightforward and will require a flexible and innovative approach to the provision of support by all relevant providers;
  • the importance of plain language in all related communications, both in general guidance materials issued to the public, or in direct correspondence with distressed borrowers;
  • the importance of identifying and distinguishing between those borrowers experiencing shorter term liquidity issues as a result of the pandemic, from borrowers with longer term, or more serious solvency related issues and the different approaches required;
  • the importance of effective engagement with borrowers to deliver sustainable solutions and facilitate as many as practical returning to repaying their debt in a sustainable way.

The issues covered ranged from those which fall under the scope of the Central Bank’s mandate to those which require consideration by the wider State framework and relevant stakeholders. The Central Bank thanks those who participated for a very useful and insightful discussion, which will help inform its approach to continuing to strive to reduce the levels of distressed debt in Ireland.

Attendance at the event was by invitation only.