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John Reynolds KBC Ireland

JOHN Reynolds is chief executive of KBC Ireland, which is owned by Belgian group KBC Bank. The bank has 12 million customers worldwide and has been doing business in Ireland since 1973.

1. Take politics out of banking

"Taxpayers own the banks and wish to sell them at a profit. We need therefore to nurture them, not destroy them," according to Reynolds.

"Following the PICAR and PILAR exercise in March with whatever capital consequences they give rise to, the new government must convert its relationship with the state-invested Irish banks from a position of unconstructive antagonism to that of an enlightened commercial shareholder seeking to maximise the return on its investment," he told the Sunday Independent. "Therefore, the State needs to overrule the vocational aspirations it might have for a politically directed banking sector, with the imperative of recouping taxpayers investment through the nurturing of a viable banking sector."

2. Review tracker mortgages and consumer legislation

"As part of a revised relationship with the banks to the benefit of the taxpayer, the perceived wisdom around tracker mortgages needs to be debated," says Reynolds whose bank has a €17.2bn total Irish loan book.

"Trackers are a great deal for borrowers and uneconomic products for banks. That status quo is fair for so long as customers adhere to their side of the bargain. Tracker products are a bad deal for taxpayers as well as lenders as they depress the value of the banks in which they have an investment."

"Pro-customer legislation needs to be counter balanced with care for the economic viability of the banking sector. Consumer legislation could not stop BOSI customers in Ireland being left high and dry after Lloyds pulled out due to BOSI's economic unviability," he adds.

3. Avoid Nama property asset fire sales

Nama and how it functions should be examined, according to Reynolds, especially with regard to cut price asset sales.

"Governance structures should be established for the Nama whereby the taxpayers are protected in a transparent way from sub-optimal asset disposals effected merely to recoup a profit over a discounted loan amount rather than the potential value of the underlying asset," according to Reynolds.

4. Boost demand in commercial property by cutting stamp duty

The recovery of the property markets are a key part in any solution to the banking and economic problems of the country. Reynolds feels that measures should be taken to boost demand.

"The disposal of commercial real estate is an essential element of the recovery of taxpayer's money -- and therefore, property transaction costs should be reduced by cutting commercial stamp duty, which will stimulate activity and increase tax revenue through stamp duty collection and Nama debt repayment.

Sunday Indo Business