Central Bank expects help for borrowers
The Governor of the Central Bank has told an Oireachtas committee the regulator is expecting banks to support borrowers during the current COVID-19 restrictions.
In his opening statement to the finance committee, Gabriel Makhlouf (pictured) said the regulator expected lenders to adopt interim measures to support borrowers experiencing temporary income shocks while longer-term solutions were assessed.
He said the bank was continuing to engage with the banking representative body, the BPFI, and other lenders.
Expectation
"Our clear expectation is that lenders engage effectively and sympathetically with distressed borrowers – in line with the Code of Conduct on Mortgage Arrears, the Consumer Protection Code and regulations for firms lending to SMEs,” Mr Makhlouf said.
The BPFI yesterday (20 October) said its members recognised the financial challenges that level five restrictions posed for many people and pledged “full support” to customers.
But there have been calls for banks to go further and bring back the mortgage and loan repayment breaks which were introduced at the start of the pandemic.
Bigger hit
Governor Makhlouf said the new restrictions would hit the incomes of individuals, households and businesses across the country and as a result the Central Bank expected a larger decline in domestic demand this year than it had forecast in its last report two weeks ago.
Although the bank expects a gradual recovery next year, on the assumption that the latest measures will be time-limited, it does not see domestic economic activity returning to its pre-pandemic levels before 2022.
“Ultimately, solving the economic crisis will be dependent on our ability to manage the health crisis as a healthy economy needs a healthy workforce, healthy consumers and a healthy community,” Mr Makhlouf said.