Central Bank Governor at the Finance Committee next week

Brendan Burgess

Brendan Burgess

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Thursday

09.30 Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach CR2, LH 2000
Scrutiny of EU Legislative Proposals: Schedule A: COM(2018)93 on Exposure in the form of Covered Bonds; COM(2018)94 on Covered Bonds public supervision;
Scrutiny of EU Legislative Proposals: Schedule B: COM(2018)126
Central Bank of Ireland - Quarterly Engagement
Representatives from Central Bank of Ireland, Mr. Philip Lane, Governor

The Governor is scheduled for 9.30. There will be a short private session first.

This would be a good opportunity to let your TDs and Senators know what issues to raise with him.



Brendan
 
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Hi Brendan, just letting you know i have emailed both Michael McGrath and Peter Burke and asked them to question him on the central banks dealings with the EBS as theres been very little publicity about EBS issues, obviously because those are being hidden behind the AIB brand. I specifically asked them to raise the variable base rate issue.
 
Here are the questions I would like to see asked

1) Have you reached an impasse with any of the lenders? If so, how many? What happens next?

You have done a good job in persuading the lenders to go well beyond their legal obligations and give trackers back to some borrowers whom the lenders did not think had a legal right to them. But are there any remaining cases where you think that the lenders should restore the tracker, but the bank is sticking to their guns? What happens next? Is it just up the affected borrowers to go to the High Court?

2) There are some groups who are expecting back their trackers, but you agree with the lender's refusal? Can you tell us which these are so that these borrowers know where they stand?
The AIB Prevailing Rate customers- Central Bank agrees with AIB
The ptsb then current customers
The ptsb discount trackers
The remaining BoI staff trackers
KBC trackers before a certain date
The EBS home loan customers.

3) Do you agree with the SSM's definition of a Non Performing Loan?
Consider ptsb's 4,300 performing split mortgages.
Let's say a borrower has a mortgage of €200k, €100k of which is warehoused.
The borrower is meeting his repayments in full on the €100k active loan.
The mortgage rate is ptsb's SVR of 4.5%
This customer is paying 2.25% on the entire loan.
Which is around half a percentage point higher than the average mortgage rate across the eurozone.
Yet, you are telling ptsb to sell those loans as you classify them as "non peforming"

These loans are very profitable.
 
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Thanks for posting Brendan I have emailed Michael McGrath and asked him to raise the AIB prevailing rate issue.
 
Brendan by PTSB then current customers do you mean the PTSB prevailing rate customers?
 
Gigi07 said:
Thanks for posting Brendan I have emailed Michael McGrath and asked him to raise the AIB prevailing rate issue.
Click to expand...

Hi Gigi

He did this very well in January and got absolute clarity on this specific issue back in January

Deputy Michael McGrath: Has the Central Bank approved the banks' approach to and conclusion on this issue?

Professor Philip Lane: Yes, this is an example.

From our work, these are now receiving a payment for contract violation and they are in the examination so they have the right to bring forward appeals. I refer to someone in a situation with a prevailing rate tracker. From a systemic point of view, we have looked at it and said that these prevailing rate trackers did not have the fixed margin promise. If a hypothetical tracker was calculated based on market funding and so on, they would have been expensive trackers if they had been offered in autumn 2008. However, by virtue of being inside the examination, it depends on what an individual was told by his or her bank manager and it depends on what documentation he or she may have received. I am not going to rule out that an individual with a prevailing rate tracker may be able to show to the independent appeals mechanism that in his or her case he or she might have been assured that this meant a cheap tracker or something else. This is the balance that is being struck. In general, this type of tracker did not promise it was going to be at some low fixed margin. Some trackers are expensive. However, because they are in the examination, the individual's circumstances, and his or her individual understanding, can be explored within the appeals mechanism.
 
Hi Brendan
I have also emailed Michael McGrath this morning asking for him to raise the Aib prevailing rate as it is an issue I feel needs more media attention to highlight the pathetic offer of compensation of €1615 offered to date and also for the central bank to look at these 4000 customers who had a contractual right to a tracker on expiry of there fixed rate but not at some rubbish rate of 7.9% as per Aib's most recent letter to customers.
Have the bank not unilaterally altered it's commitment to the customer and misappropriated our funds as a result. Has there been due diligence in this action by the bank.
 
To all who made numeroys submissions under the threads about EBS and "variable base rate "etc, i do hope im not the only one who has contacted their TDs, regarding our issue, especially TDs that are on the finance committee. The people i mainly refer to are RAzvanR, haveaniceday, bikini widow, B26354 and dguyo. Lads i dont blame ye if yere dissillousioned etc but i feel we need him questioned about all the issues but especially ours, might generate a bit of publicity. If yeve already done so fair enough but it isnt too late if not.
 
@tonymac all done, although I suspect answers will be restricted to something like ..... CB cannot discuss EBS as an enforcement action is underway / being applied.
But lets wait and see.

Best wishes,
BW
 
My main fear is exactly what you highlight Bikini Widow and thanks for what youve done. The thing is if thats the case theres no point in having him in as theres enforcement action being taken against all of them if im right.
 
I’ve also emailed McGrath & a number of others on the committee regarding EBS home loan customers and to raise this issue along with issues around subject data access requests and the documentation being provided by the bank.
 
Thanks Brendan
I think the CB needs to be challenged more vigoursly here. This is total waffle. I accept that if tracker rates existed after Oct 08, they would have been significantly higher than 1.5%. However, they would have been nowhere near 7.9! Are the CB saying here that AIB have provided compensation on the basis of one size fits all? And that some of this cohort are entitled to further compensation, but need to lodge appeal before the Bank will consider same?
 
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Peter Burke and Michael McGrath responded saying they will raise the EBS issues, haven't heard from others.
 
Has started with Gov Lane giving opening statement on Tracker update.
 
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