Belfast Telegraph

Thursday 2 October 2014

Extent of debt mountain outlined

The Central Bank will publish figures compiled using forensic stress tests

The full extent of the multibillion-euro black hole in Ireland's bust banks will be detailed on Thursday.

The breathtaking losses in Allied Irish Bank (AIB), Bank of Ireland, Irish Life and Permanent (IL&P) and the EBS building society will be set out as the new coalition Government attempts to finally measure the debt mountain.

The Central Bank in Dublin will publish figures compiled using forensic stress tests before Finance Minister Michael Noonan gives the Government's response.

It is expected to say that the banks need about another 30 billion euro to remain in business.

Most of the loan losses caused by reckless lending to now broke property developers have been identified but the skeleton in the closet is a ticking timebomb of thousands of homeowners unable to repay mortgages.

More than 44,000, or 5.7%, of homeowners are at least three months behind with their mortgages - valued at a colossal 8.6 billion euro.

Joan Burton, Minister for Social Protection and former finance spokeswoman for the Labour Party, warned the debt of ordinary households was now the biggest issue.

"We need to sort out a refinanced arrangement with our partners in the EU and IMF and basically give Ireland a fresh start," she said.

"That's the mandate we got in the election and that's the mandate we propose to fulfil.

"We have a lot of positives in the Irish economy at the minute but there is that cloud on the horizon."

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