Our banks are long dead – let them go to the wall
SINCE 2008, Irish households have been paying down debt like never before. Over the past five years and despite austerity in all its forms, household debt levels have reduced by 17pc. In 2013 alone, we paid off €10.6bn of mortgage debt. As our personal debt levels remain exceptionally high by international comparisons, we can expect that deleveraging (paying off debt) will continue for years to come.
The psychology here is simple – people do not trust the moneylenders and for good reason. The economic collapse and consequent human misery can all be traced back to a financial system that lashed out cheap credit, driving asset prices up, leading to more credit. In the end, it was nothing more than a giant Ponzi scheme.
But now there is another even more intractable problem.