Mortgage arrears problem is my biggest regret, Honohan reveals
Published 26/11/2015 | 02:30
The inability to deal with the mortgage arrears problem more quickly has been Patrick Honohan's biggest regret.
As he marked his final day as Governor of the Central Bank, Professor Honohan said he was disappointed that he wasn't able to improve the situation more swiftly.
Prof Honohan, who has been in the job since 2009, retired yesterday and his successor, Philip Lane, formally takes over today.
"One of the things that I was very anxious to do was to have the mortgage arrears problem sorted more quickly, the triage between people where a deep restructuring of the loan was appropriate and where that wasn't possible, and there would have to be repossessions," he said.
He was speaking on the fringes of a workshop on debt yesterday organised by the Nevin Economic Research Institute.
"That triage has taken an awful long time. The end results may be better than they have been in some other countries where there have been more aggressive repossessions, in the United States, in Britain. The end results may be better, balanced, but it is costly to have taken such a long time and it is still going on.
"It's on the right tracks now, it will be sorted over a period of time to come, but I'm a little bit disappointed that I wasn't able to push it along more."
Asked if this was his single biggest regret, he replied: "Absolutely."
He added: "I don't think back to say if I had done this and this, it would have been better. I can't think of steps that would have made it work better." Latest data from the Central Bank shows that 98,137 mortgage accounts were in arrears at the end of June.
The number behind with their mortgage payments for more than 90 days was 70,299.
This is down from 126,005 and 90,343 respectively during the same period last year.
Asked if he intended writing a memoir of his time in office, Prof Honohan said he would "publish stuff about the crisis" but suggested he wasn't interested in a detailed memoir.
"I'm not planning to get involved in Irish economic debate over the next year or so, there's a cooling off period that I think is appropriate," he said.
"I'll find an office in a university and I'll read and I'll write and I'll go to conferences and I'll present my views, the sort of quasi academic, semi retirement."
Amid criticisms from some quarters that the Central Bank, under his tenure, didn't do enough on consumer protection, Prof Honohan said any organisation has "limited bandwidth" and has to concentrate on the most urgent and pressing issues.
He said the organisation had made a big push in the area of insurance over the last year.
"We work very hard on consumer protection to protect over indebted borrowers from any kind of unfair or abusive practice," he said.
"We work very hard to get schemes right for that. There might be an opportunity, now that we have a little bit more bandwidth, to shift to that area, to think more broadly about consumer protection and ask ourselves whether we need to be more proactive about talking about good consumer practice rather than just preventing bad practice. My successor will have to decide what his priorities are on that."
On the Eurozone economy, Prof Honohan said he sees signs that the European Central Bank's programme of quantitative easing is working.
"I think we can see results, not a huge bounce back to a 2pc inflation rate, but I think if we didn't have it we would be looking at a worse situation," he said.
"Even though there are signs of a better recovery, inflation forecasts are still not moving up and therefore definitely they need to keep the foot on the accommodation pedal."