Monday 17 December 2018

'I will hold bank executives personally accountable to solve this issue' - Paschal Donohoe on 'unacceptable' tracker mortgage scandal

Finance Minister Paschal Donohoe will meet representatives of a number of banks today. Photo: Steve Humphreys
Finance Minister Paschal Donohoe will meet representatives of a number of banks today. Photo: Steve Humphreys
Catherine Devine

Catherine Devine

Minister for Finance Paschal Donohoe has said that he will hold bank chief executives "personally accountable" to solve the tracker mortgage scandal.

Speaking on the Marian Finucane show on RTE Radio One, Paschal Donohoe said that a timeline has been put in place for banks to act on the crisis.

"What has happened over the last week was absolutely unacceptable. It sheds a light on what was happening for many years. But there are many things that the banks are involved in that are not shady.

"In the past, because the banking system was so intertwined into our economy and the difficulty that we had in the economy, the choices that were open to Michael (Noonan) and Enda (Kenny) were so narrow because things were so difficult."

He added that things "have now changed".

"The economy is now growing. Banks are making profit again or are returning to profit. If this matter is not dealt with in the way the Central Bank needs it to be dealt with and I want it to be dealt with, I will begin to act in a different way as a shareholder. In relation to what happens to bankers' pay, bankers' bonuses.

"I have said to all chief executives that I will hold them personally accountable for the resolution of this issue. It is unacceptable what has happened, not only in how this issue happened with tracker mortgages but alongside the challenges recently that the Central Bank has had. We have now outlined figures and timelines by which these issues have to be dealt with."

He added that banks have agreed that the December deadline will be met.

"The Central Bank will then provide me with a final report on the matter."

In regards to banks not being taxed as part of the bailout, Mr Donohoe said that it is "not a gift" to the banks.

"It's a feature of how we tax companies, you can carry forward your losses to reduce the tax bill.

"The reason why I'm not planning to change that at the moment ... is alongside our focus in the banks and the outrage over what has happened in the last week or so is also the fact that we have €11.5bn of the Irish taxpayers' money invested in the banks as well as the shares we hold. At a point in time we need to get that money back. If we were to make a fundamental change on how we tax that part of the banks it will cause another consequence in terms of that money."

Mr Donohoe said that the average shareholder in a bank was "wiped out" and "lost all their money".

"Even though we have sold a portion of AIB and got money back for that, we still have approximately €11bn in three other banks. I want that money back so we don't pass that debt onto future generations and we can invest in other things."

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