“Mortgage arrears remain one of the most important issues in Ireland” – Deputy Governor, Ed Sibley

05 November 2019 Press Release

Central Bank of Ireland

  • More work needs to be done to improve how the financial system serves consumers and the Irish economy
  • Central Bank focused on serving the public good by ensuring the financial system is resilient and consumers are protected
  • Central Bank expects mortgage arrears to be sustainably resolved regardless of type of lender
  • Central Bank’s ‘whistleblower’ regime is working well - individuals should continue to come forward where they have concerns regarding behaviours or actions in financial services firms

Speaking at the MABS Conference, ‘Money Advice and Budgeting – 2020 and Beyond’, Deputy Governor, Ed Sibley praised the work of MABS and outlined how the Central Bank’s different responsibilities connect to build financial resilience and how this protects consumers.

Mr Sibley noted that much of the financial system is working well, but there are key areas including in insurance and the mortgage market that were not operating as well as they should. He emphasised the Central Bank’s commitment to serving the public good by continuing to drive improvements in the functioning of the financial system - such that it better serves the needs of consumers and the Irish economy.

Mr Sibley highlighted the importance of individuals working in financial services taking action when they become aware of issues in how firms and their management are behaving. He outlined that 165 protected disclosures were made to the Central Bank in the previous year, and described the Central Bank’s actions taken on the foot of the reports.

“The Protected Disclosures regime allows members of the public or staff of regulated firms to provide information on suspected regulatory wrongdoing in a confidential form to the Central Bank. We listen carefully and take action.”

On mortgage arrears, Mr Sibley said: “There has been considerable progress in resolving mortgage arrears. However, more than 10 years since the first waves of the financial crisis started buffeting Ireland, and six years since the peak of non-performing loans in Ireland we still have serious problems with mortgage arrears in Ireland.”

Deputy Governor Sibley noted “The Central Bank’s approach to mortgage arrears resolution is focused on ensuring the fair treatment of borrowers through a strong consumer protection framework while ensuring lenders have appropriate arrears resolution strategies and operations in place.

“This includes, regulatory requirements such as the Code of Conduct on Mortgage Arrears, which was put in place to ensure the fair and transparent treatment of financially-distressed borrowers and governs how lenders interact with these borrowers.”

Deputy Governor Sibley highlighted the many supports that are in place for those in mortgage arrears and noted that the significant reduction in mortgage arrears had primarily been achieved through engagement and restructuring. He outlined the multiple tools available to resolve mortgage arrears with engaged borrowers, including forbearance, restructures, accounting write downs, mortgage to rent, and through the Insolvency Service, noting that “A sustainable restructure is good for the borrower and for the lender, including in retaining interest income. These long term benefits are not always being given sufficient prominence relative to shorter term capital relief.”