ptsb's attitude to debt forgiveness

[Brendan Burgess]

I have just come across this intersting Irish Times interview with Jeremy Masding, the Chief Executive of ptsb. It sets out their policy towards debt forgiveness.

Separately, various politicians and interest groups are pressing hard for debt write-offs for distressed borrowers as a permanent solution to this seemingly intractable problem.

Cut out the cancer and the patient can be cured is the narrative and sure is that not why the banks were given their bailout funds in the first place?

“It’s an interesting perspective,” Masding says. “I have a fiduciary duty to the taxpayer to protect their capital. Judicious use of capital does not mean debt forgiveness.

“My definition of debt forgiveness is the unilateral forgiveness of debt without going through a mortgage [resolution] process. Unless the rules of the game change, that’s not going to happen.”

Masding adds that this does not mean no Permo customers will be offered a writedown.


“Each case is different and if, at any point in time, part of a sustainable treatment for a customer is selectively writing down some capital, that is normal banking practice. I’m not arguing with the narrative that says it is normal that capital is used for unexpected losses.”


So some customers will get a writedown?

“I am saying that normal banking practice is that you engage in a conversation with a customer, you put them on a treatment and if, at some point, over time there’s an element of that capital that is irrecoverable that is what the capital base [of the bank] is for. I would expect to sit here as I have done in every job in the past 20 years with cases where we will write off capital.

“Depending on the customer’s circumstance, it could be that we will have to write off, but I think my job is absolutely to minimise those situations. My job is to protect taxpayer’s funds and to do everything I possibly can to put a customer on a long-term treatment that’s sustainable.”

 

[Bronte]

Firstly I don't believe anything that bankers say. And his concern for tax payers is just lovely now the horse has bolted.

They are writing down debt they just won't say they are and it's impossible to get them to write it down on paper and ink.

 

[Gerry Canning]

Mr Masding has a new found (fiduciary duty to the taxpayer). Is this the same Taxpayer his organisation has sold Payment Protection Policies on loans and Mortgages to ? Will his (duty) to customers extend to repaying on any or should I say many mis-sold policies.

 

[Brendan Burgess]

To be fair to him, he is in the job 12 months and is trying to repair a lot of the damage done by his predecessors.

He did bring down the SVR, by around 0.6%

Anyway this thread is about Debt Forgiveness.

Brendan

 

[Bronte]

1. “My definition of debt forgiveness is the unilateral forgiveness of debt without going through a mortgage [resolution] process. Unless the rules of the game change, that’s not going to happen.”

2. Masding adds that this does not mean no Permo customers will be offered a writedown.

3. “Each case is different and if, at any point in time, part of a sustainable treatment for a customer is selectively writing down some capital, that is normal banking practice. ”

So some customers will get a writedown?

4. “I am saying that normal banking practice is that you engage in a conversation with a customer, you put them on a treatment and if, at some point, over time there’s an element of that capital that is irrecoverable that is what the capital base [of the bank] is for.

5. we will write off capital.

6. “Depending on the customer’s circumstance, it could be that we will have to write off,


Above is taken from the article
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To translate the bank speak. Point 1 has two meanings. Firstly he's saying what he defines as debt writeoffs, basically it's where there is no 'process' and they don't do that. And secondly they will engage in this magical 'process' in certain circumstances (basically points 2 to 6) and write of debts but it won't be known as or called directly debt writeoffs. Waffle to my ears really.

Why he thinks people are so stupid as to not see what he is saying I don't understand. Probably he has to talk this way to stop any more strategic defaulters, to convince complaint tax payers into thinking that the bank are taking a hard line on debt forgiveness and to speak with the same message as the government.

So in plain English they will do debt writeoffs where necessary. But it will be tough to deal with them.

Where they do writeoffs it will be no doubt called something other than debt forgiveness, they will try and avoid putting it in writing to customers and if they do come to an arrangement they will tie you up in a legal document that you'll never tell anyone about it.