I read in the IrishTimes today that the head of AIB arrears support unit Garry
Stran has finally admitted that there is going to have to be some sort of household debt forgiveness. This is what some of us have been saying is so necessary to get this county off its face and back on its knees for a long time. AIB seems to be the first to come out of denial!
If the article is to be taken at face value and I have no doubt to believe otherwise and PAMELA NEWENHAM is a very creditable journalist, this will have the single biggest impact in kick starting our broken economy. This will mean much more then not paying the €3.1b Anglo bond, increasing taxes and introducing massive cuts.
If the banks finally realise that they have to free people of the massive household debt burden, which THE BANKS ARE RESPONSIBLE FOR GIVING THEM IN THE FIRST PLACE, it will have a massive effect on the confidence of people and give people a little hope for the future.
The hope effect for people will be so important to everyone because it will give people the confidence they need to get back into the market buying again. This will directly effect those who do not receive debt forgiveness as much as those receiving it.
For these who do not need debt forgiveness YET stopping the rot and economic disaster we a currently experiencing is even more important for them as they probably have assets to protect. If this current situation continues they too will be left with nothing.
I am however amazed that this story has not been headline news in the media today. Hopefully this will change as we get through the day but the importance of this cannot be understated.
Mr. Stran outlines the banks plan in relation to engaging with people who have been cooperating and trying to sort out their problems. “If they cannot pay they will not be forced too”! How refreshing is this? Someone talking since at long last, willing to look at the problems and provide a solution. This will be a solution for both customer and bank because both are being crushed by the problem. For both to survive the issues has to be addressed and the quicker the better.
I understand AIB have trained up over 300 new staff to deal with the issue and hopefully we will start to see the benefits of the new policy in the new year. Lets also hope the other banks get some sense and start dealing with their problems in a similar way.
Paul C Carroll
NEO Financial Solutions