There are times when I feel that I am just banging on about the same old stuff that is affecting so many people I meet every day .. Household Debt… Am I really right? Is there anyone really taking heed of what is going on in the country? How this household debt issue is really stripping people of their dignity and fight for life?

The household debt issue is holding back Ireland Inc. It is destroying the ability of our country to get back on its feet. It is stopping people who have the ability to spend spending. And above all it is holding back our banks from becoming banks again and not just being debt collection agencies.

This morning maybe there is some light at the end of the tunnel after all! Reading the article on the Moody’s report on Irish mortgages in the Irish Independent today where they discuss the massive household debt and declare “that Debt forgiveness provides an efficient mechanism to deal with the current mortgage arrears and negative equity issue” HALALUIA! There is someone out there dealing in reality! Yes we know the banks are going to have to recognize more massive losses, yes minister Noonan is not going to have to spend his time looking to extend the Anglo bond to 40 years but he is going to have to figure a way of getting the ANGLO bond funds BACK into the country to fund the next bank bail out ….. or rather the first BANK BAIL IN.

In my Open letter to the CEO of the Permanent TSB last week I said debt forgiveness is on its way wether the bankers like it or not and they best figure a way to deal with it…. well here it comes and at long last!

Finally let me deal with the issue of “moral hazard”. The two greatest acts of moral hazard in this country are firstly the banks in the way they lent money and spent money on their customers (I missed that gravy train sadly) and staff knowing that when and if it came tumbling down the Government/ECB would bail them out. Secondly, the government in the massive waste and overpayment of its officials it too knowing that if it all went wrong the ECB/EU/IMF would have no choice but to bail them out in order to save the EURO.

So the possibility of there being some risk of moral hazard due to household debt forgiveness is a direct fallout from the actions of our Bankers and Governments. It is too late to worry about it now …. Just get on with the Debt Forgiveness.

Paul C Carroll FCCA