Moral hazard… debt forgiveness… wood for trees… May 13, 2011
Posted by WorldbyStorm in Economy, Irish Politics.trackback
However, he said no government could announce debt forgiveness on a wide scale [for mortgages] and banks and their customers ultimately had to take decisions and work through any difficulties themselves.
“There is a genuine issue about moral hazard. You can’t be writing off one person’s debt and expecting another person to pay,” Mr Bruton said.
Advertisement
“There is a genuine issue about moral hazard. You can’t be writing off one person’s debt and expecting another person to pay,” Mr Bruton said.
Unless of course that one person is a bank and another person is a citizen
Those comments don’t preclude the possibility for other debt management or deferment measures such as recouping the large part of the principle until the time we’re collecting from the estate of the person or where the banks end up going down the route of some form of a shared ownership scheme that reduces the monthly outgoing for the person while leaving them in their house but also means that they lose some equity in the property. A major problem at the moment with doing any of that is with a falling market no one wants to exercise any options as yet in case they might in their view be settling for too small a slice.