PEOPLE WHOSE mortgages fall into arrears because they have lost their job should be dealt with in “a humane way” by the financial institutions, Taoiseach Brian Cowen said yesterday.
Speaking in Tallaght yesterday after the launch of a project to extend the Luas line to Citywest, Mr Cowen said: “I think that that would be an important advance to ensure that we deal with such difficulties in a humane way that would reinforce for people that every possible effort must be made to have them reschedule those repayments where there is a genuine hardship.
“I have been saying for some time now that in the event of people becoming unemployed . . . that people who find themselves in that situation that we put on a statutory basis a code of conduct which is in place and make sure that it refers to all financial institutions in the country.”
Mr Cowen also indicated that a forthcoming report on bank salaries would be put into effect.
Pointing out that Minister for Finance Brian Lenihan would receive the report shortly, he said the Government expected its recommendations would be implemented.
Mr Cowen said in response to a question about pay levels for top bankers: “I would make the point that since the guarantee scheme was introduced we have the ability as Government under this Remuneration Oversight Committee to look at all areas of remuneration in the banking sector for those institutions that are covered by the guarantee.
“They will be reporting in the coming weeks to the Minister for Finance, and we expect those recommendations will be implemented.”
Minister for Health Mary Harney said that salaries of top banking executives should be cut and performance-related bonuses “should not be paid”.
“Pay to very senior bankers is usually related to performance and Irish banks have not performed well in the last year and therefore pay packages have to reflect that,” Ms Harney said.
“The kind of salary levels we’ve seen in recent years cannot be the norm in the present circumstances we find ourselves in.
“Given that banks have not been performing, clearly bonuses related to performances couldn’t and shouldn’t be paid. I understand that for 2008 there will be substantial cuts to their pay and that’s the way it should be.”
Fine Gael leader Enda Kenny said he did not want to see a situation where the €7 billion which will be pumped into the State’s banks disappears within a short time “down the grate”.
Speaking in Castlebar, Mr Kenny made it clear he would support the recapitalisation programme only on very strict conditions.
He said he wanted guarantees that the money goes where it is intended; that it is available for credit lines for small shops and businesses; and that the Government makes it a prerequisite of the deal that the banks deal with remuneration and management structures.
“The money better not be for the remuneration of executives. It better not be used to pay what they call ‘Tier 2 Bond Speculators’ from abroad. It better not be for paying off banks which banks have already borrowed from.”
Mr Kenny said he had been told by letter that the Taoiseach would facilitate him by meeting with the governor of the Central Bank.
“I also want to meet with the Taoiseach himself and the regulator. After all, what is the regulator regulating? What is the governor of the Central Bank overseeing? Is the Taoiseach being led by the nose here to a point where we don’t know what we are getting into.”
