Should mortgage debts be written off?
The question of banks writing off mortgage debt of householders unable to pay has hit the headlines in the past weeks. Bank of Ireland, AIB and Bank of Scotland have stated they are considering some form of debt write-off. Ireland’s debt crisis is a major burden on the banks and the Irish economy. As part of their recent bank stress test the Central Bank estimated €9.5 billion in bad mortgage debts in the Irish banks between now and 2013. The high level of personal debt is adding to the economy’s deflationary spiral.
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