Sinn Féin MEP Matt Carthy has commented on media reports regarding regulators’ views on the sale of distressed mortgages to vulture funds.
Carthy, a member of the European Parliament’s Economic and Monetary Affairs Committee, was speaking from Brussels in response to an article on the topic published at the weekend in the Sunday Business Post.
Mr Carthy said:
“The comments from senior regulators reported in the media confirm what Sinn Féin has long been saying – that banks have other options to reduce their non-performing loans other than selling distressed mortgages to vulture funds.
“PTSB, Ulster Bank and other Irish banks can no longer hide behind the claim that the ECB’s guidelines for reducing NPLs, or any other ECB mechanism or directive, require them to sell off portfolios when regulators reject this outright.
“Senior regulators have confirmed that banks have not received instructions from the ECB to sell off distressed loans, and that they have several other options available to bring down bad debt including restructuring and writedowns.
“I wrote to the chair of the Supervisory Board of the ECB, Danièle Nouy, in November last year requesting clarification on whether split mortgages are classified as non-performing loans under the guidelines. She responded that the ECB was conducting a full legal and technical review on the topic. This month I have again written to the ECB requesting clarification on the claim by Irish banks that the ECB is forcing them to sell off their loans to vulture funds.
“The very significant comments made by senior regulators to the Sunday Business Post yesterday clearly aim to publicly dispel the myth that the banks must sell to the vulture funds, and confirm that debt restructuring and writedowns are definite alternative options. The comments also clarify that it should be possible for split mortgages to be classified as performing loans in certain circumstances.
“While these backgrounder comments from regulators are welcome in that they add clarity to this issue, both the Central Bank and ECB have a responsibility to publicly reject the banks’ claims that they have no other options to reduce their debt, on the record.”