Honohan backs colleague Muldoon and warns of worsening income inequality
THE head of the Central Bank, Patrick Honohan, yesterday threw his weight behind Fiona Muldoon after her robust comments aimed at the bank sector.
Addressing the Leinster Society of Chartered Accountants, Mr Honohan said the overlap between households in negative equity and those with mortgage arrears was smaller than thought.
That finding tallied with claims earlier in the day that unemployment, not negative equity, was the big factor in people falling behind on home loans.
"Unemployment and income loss may be a stronger predictor of mortgage arrears than negative equity," Mr Honohan said.
Mr Honohan also touched on the impact of the financial crisis on living standards.
"It's overall effect, at least between 2009 and 2010, has been to widen income inequality ... it remains to be seen what the longer-term impact will be."