Five years on, Ireland’s banking inquiry with no teeth

Taoiseach Enda Kenny. Source: Google Images

We are just a few days away from the fifth anniversary of probably the most important event in Irish history since we won our independence.

You don’t remember what it is?  That’s not surprising because it’s something we’d all like to forget.
But this is something that won’t go away, a disastrous decision that is still dragging us down five years after it was made.  It’s one that has had catastrophic repercussions for the country, repercussions that continue today, five years later, and will continue to be felt for at least the next decade.

Yes, of course I’m talking about the blanket guarantee given by the last government here to all the Irish banks at the end of September 2008.

This guarantee covered all the loans, deposits, bonds and other liabilities of all the Irish banks.  It guaranteed that if the banks could not pay back everything they owed, the Irish state would step in and do it for them.

The reason this was necessary was because in the wake of the collapse of Lehman Brothers bank in the U.S. a couple of weeks earlier, a major flight of capital out of the Irish banks which was already in progress accelerated dramatically.   By the end of September 2008, at least two of the Irish banks were facing immediate collapse and the others were under severe pressure.

So the Irish government stepped in and guaranteed the Irish banks.   It was a bold, comprehensive move, deliberately designed to put an end to growing international concerns about the safety of leaving money in Irish banks.

Unfortunately, at the time no one in Ireland was aware of the huge scale of the liabilities of the Irish banks, and no one knew just how far the Irish property market — on which most of the lending of the Irish banks depended -- would fall.

What happened, you will remember, was that within two years the state bank guarantee had bankrupted Ireland.   We had got to the stage where the international money markets simply would not lend us any more.  The bank debts were so huge that the markets knew they were dragging the Irish state down.

A huge budget deficit had also opened up because the revenue from the property boom was gone.

In a word, we were bust.

Faced with the prospect of state collapse, the government had to sign up for an €85 billion bailout from the EU-IMF and enter a four year program of economic austerity, monitored every three months by an EU/IMF team sent to Dublin.  The program was aimed at putting our national finances back in balance again.

Less than a century after we had won our independence, we had lost our economic sovereignty.  We had been shamed before the world, exposed as being unable to run our own affairs.

The anger among ordinary Irish people about all this has been immense.  They threw out the previous government  which had presided over the boom and bust.  The rout of Fianna Fail, once the giant of Irish politics, was so severe that the party may never recover from it.

Apart from the humiliation, the Irish people have been faced with higher taxes and cutbacks in state services as the austerity squeeze has tightened over the past few years.  Each budget since the collapse has added to the misery, and the next one is now just weeks away.

There has been great pressure here for answers.   How did the banks get themselves into such a mess? How did the Central Bank and the regulators allow it to  happen?

Why did our politicians and top civil servants not realize that the boom was out of control and that at some stage the bubble would burst?  Why is the ordinary Irish taxpayer left carrying the can for all the debts piled up by banks, developers and speculators?  How come no one has been jailed for what happened?

The present government initially promised to renegotiate our bailout deal with the EU-IMF, and also promised to make those responsible for our economic collapse accountable for what they did.

The bailout renegotiations have been only partly successful, with the result that the Irish taxpayer is still carrying the enormous burden of our bank debt.  The promise to expose those responsible for our economic collapse has not been successful either.

A lot of the bankers, regulators and politicians involved are gone, mostly on fat pensions. Although criminal cases are underway against one or two bankers, no one has gone to jail so far.

And despite all the public anger, there has been no pubic inquiry into the disaster.

Last week Taoiseach (Prime Minister)  Enda Kenny finally announced in the Dail (Parliament) that an official inquiry is to be held under new legislation called the Oireachtas Inquiries, Privileges and Proced- ures Act 2013.

Which Dail committee is to hold the inquiry has still not been decided.  But it hardly matters because committees of the Dail have little or no power, even with this new legislation.

Unlike in the U.S., our parliamentary committees are toothless wonders.  Because of a Supreme Court decision here a few years back, they are unable to make adverse findings against any individual who is not a member of the Irish parliament.

They can’t force people to give evidence, or even to turn up for hearings.  They can apply moral pressure on people to appear, but that’s hardly likely to weigh heavily with our bankers, as we have learned.

There is also a further complication.  The rogue bank which was the  main driver of the property bubble here, Anglo Irish Bank, cannot be part of the inquiry for some time because of a current court action against its former boss which could drag on for a year or more.   Holding committee hearings into what went on in Anglo might prejudice his trial so that is out.

This means we would have the farcical situation that a public inquiry into the banking crash here would not include the bank that instigated the crazy lending spree which was our downfall.   The Anglo collapse alone is responsible for debts that are close to half of the bailout.

It’s also possible that executives from other banks may refuse to be questioned by members of the Irish parliament, almost all of whom have made scathing comments about the banks in the Dail over the past few years.

The bankers, when it suited them, would be able to claim that the politicians are not objective and therefore are unsuitable to carry out an Inquiry.
And don’t you just know that there are posses of expensive lawyers just waiting to defend their banking clients and bury the work of an inquiry with a succession of court actions.

Of course there is the added worry that very few, if any, or our parliamentarians have the qualifications or experience needed to explore the complexities of the banking collapse.

We have already had two or three expert reports into what happened here over the past few years, but none of these has provided the public with an adequate explanation of what went wrong, why, and above all, who was to blame?

That can only come from a public inquiry with real teeth.  And that is something we are not getting.

Kenny was putting a brave face on it in the Dail last week.  He said he wants the inquiry up and running as soon as possible and he wants it to cover three areas — the bank guarantee and the events leading up to it; the role of the banks and their auditors; and the role of state institutions.

“The objective should be to determine, without fear or favor, and with dispassion and integrity, all of the facts that led to the collapse of the banking sector,” Kenny said.

Don’t hold your breath.

Junior doctor’s strike shows Irish health service needs a cure

Junior doctors counting ballots prior to approving industrial action in Irish hospitals next week.

Next week many of the thousands of junior doctors who actually do most of the work in Irish hospitals are due to go on strike.  And the interesting thing is that, unlike most strikes, this potentially disastrous threatened strike is not about money. It's about grossly excessive working hours.

For years the junior hospital doctors here have been pleading that their working hours should be reduced.  Many of them routinely work 70 or 80 hours a week and 100 hours is not all that unusual.  

Within the very long working week they occasionally have to work very long individual shifts and sometimes -- with cutbacks causing staff shortages -- these non-stop shifts can extend up to as much as 36 hours.  
Junior doctors have talked about how they don't have time to eat, rest, or even to go to the bathroom at some stages.  They have talked about being so sleep deprived that they are out on their feet some of the time, a situation that is dangerous not just for the patients but for the young doctors as well.  

Efforts are now underway to try to avert the strike, due to start on Wednesday of next week.   But given that this disastrous situation has been continuing for many years  and nothing has been done about it, sorting it out at the last minute is not going to be easy.  

The fact that hospitals are under ever greater pressure these days and that winter -- the worst time for hospital admissions -- is almost here doubles the difficulty.

What the junior doctors are demanding is an immediate end to shifts of more than 24 hours.  They also want a detailed plan on how the Irish national health authority, the Health Service Executive (HSE), by the end of 2014 is going to comply with the European Working Time Directive, an EU rule which says workers should not have to work more than 48 hours a week on average.

Incredibly, when this EU law came into force around 10 years ago junior hospital doctors in Ireland were excluded because there was a recognition that it would take time to solve the Irish situation without putting sick people here at risk.   Since then little or nothing has been done.  

Now it's crunch time, and the junior doctors are in no mood to back down or moderate what they are demanding.  They know that if they do the issue will be put on the long finger once again.

So why do the 4,500 junior hospital doctors in Ireland have to work such long hours?  There are a number of reasons, some of them very complicated.  

First of all, there are not nearly enough senior hospital doctors and consultants, who maintain their position and their very high earnings by preserving their elite aura and status.

A new deal has now been hammered out to increase the number of consultants, limit their huge earnings and make them more available in hospitals, but the changes are not extensive or immediate enough to correct the structure of our health system which is still badly skewed.  The fact is that most of the load in our hospitals for all the routine care still falls on the junior doctors and nurses.

The situation is exacerbated by the cutbacks in recent years.  In smaller Irish hospitals in particular with fewer junior doctors available, staff cutbacks and absenteeism mean that overtime has to be worked at pressure times to avoid a crisis.  

Junior doctors would do this anyway, but they are expected or even required to do it by hospital management under their terms of employment.

The obvious answer to the problem might seem to be to train a lot of extra young doctors so that we have a bigger supply for our hospitals.  But it's not as simple as that.

It costs the state a small fortune to put each new doctor through university here because medical students pay only a fraction of the total cost of their medical education.  If you get a top score in your high school leaving exams here you get enough points to do medicine in college, and the state then pays over 90 percent of the cost.  

Even if the state had the money to produce more junior doctors, the fact is that around 75 percent of them emigrate once they have completed their compulsory one year hospital internship after finishing college. They have to do this year to be fully qualified but once it's over, most of them are out of here.  

And it's not that they leave just to get more money in other countries, because  junior hospital doctors here are well paid (their pay is higher than in Britain, for example, starting at around €30,000).   Working overtime they can easily double that,  or even triple it.

So it's not primarily about money.   They leave, they say, because they need to get experience in other countries where medical technology and systems are  more advanced.  

Some do come back eventually to be senior hospital doctors and consultants, but a lot of them never return.   Which means that the Irish state is funding the very expensive education of a lot of Irish doctors now working in the U.S., Canada, Australia and elsewhere.

This causes justifiable anger among taxpayers here, yet no one seems to know how to stop it.  The medical profession opposes any restriction of their ability to work abroad after graduation.  

One way might be to require medical students to sign contracts to work in Ireland for five or 10 years after graduation, the only exception being students who have paid the full cost of their own education.  But this is also opposed.

The main reason they leave is that they cannot cope with the horrendous working hours.  They can earn as much abroad without having to work a 70 or 80 hour week.

And they can then come back after 10 years or so when they have enough experience to be consultants and join the very highly paid elite of the Irish medical profession.

The real answer to all this involves reducing the God-like status of the consultants, and having far more of them on the hospital floors doing the day to day work at a reasonable cost.  But that's a long way off.

In the meantime, the HSE continues to import doctors from India, Pakistan and African countries to fill junior hospital doctor staff lists here.  Our system is so screwed up that we are doing this at the same time as all the Irish junior doctors educated here at the expense of the Irish taxpayer are leaving!

These doctors are coming here rather than staying in their home countries where they are desperately needed and that's not good.

And it causes problems here as well, with lack of communication due to poor English or even doubts about the medical competence of some of these imported junior doctors.

Most of them seem to be okay, and they have to be approved by the Irish Medical Council before they can work here.  But some recent cases would make you wonder about how thorough this assessment is.  

Dozens of Indian and Pakistani junior doctors hired by the HSE have been refused a license to practice here because of language problems.  Earlier this year there were problems with a doctor from Sudan, and now another very worrying case involving a doctor from Nigeria has come to light.
 
This Nigerian doctor is accused of attempting to read an X-ray while holding it upside down and trying to cut open a patient’s hand with a scalpel in order to insert a tube.  He faces 13 counts of professional misconduct or poor professional practice, including telling a colleague that scans performed on a patient’s kidneys were “fine” when they in fact showed multiple growths.

He also is accused of asking a nurse whether a patient's pulse reading of 165 beats per minute was high; that he was unable to identify the nasal bone in an X-ray when asked to do so; and that he decided that a patient had a benign prostate condition when this was not the case.

The Medical Council inquiry which was in the papers here last week heard that he had been a qualified doctor for 10 years and had previously worked in Crumlin Children's Hospital in Dublin before working as a senior hospital doctor in the Midlands Regional Hospital in the town of Portlaoise in 2009.  

There were complaints about him less than three weeks after he started in Portlaoise.   God only knows what he got up to in the children's hospital.

The hearing into this case has been adjourned because the doctor is now back in Nigeria and is claiming he can't get a visa to return here.  He is a graduate of the University of Nigeria which produces hundreds of medical graduates every year.   Nigeria is a country where corruption is rife at all levels, and there is no reason to assume the universities there are immune.

It's no wonder that some people going into hospital here feel like asking the doctors treating them where they qualified but are afraid to do so because of fears of being called racist.  And it's part of the reason why so many Irish people do whatever they can to avoid hospital altogether.

As they say, if the disease doesn't kill you, the treatment probably will!

Dublin's Priory Hall shows the human cost of the Irish property bust

Hundreds of people took part in a protest march outside of Priory Hall in Dublin last year.

The worst example of the building boom in Ireland, Priory Hall, is a Dublin apartment complex that encapsulates everything that was wrong with the Irish property boom.

It made headlines in the past couple of weeks because of the suicide of one man who had bought an apartment there.  Last week that forced Taoiseach (Prime Minister) Enda Kenny, after a disgraceful two year delay, to finally say something about a situation that has become a national scandal.

But  before we get to the hypocrisy of Kenny, let us first take a look back at why this apartment development in Dublin has come to be regarded as emblematic of everything that was phony and rotten in the boom here.

The apartment complex was built on the north side of Dublin in an area called  Donaghmede, a sprawling working class suburb of small houses where a lot of good people live, but which also has high unemployment and anti-social problems, including drugs.

During the boom, however, even poorer areas like Donaghmede were seen as suitable places for extravagant development, partly because there were vacant sites. In the adjoining Darndale area, which has a worse reputation than Donaghmede, they even built the Dublin Airport Hilton Hotel.  (It's actually at a main roadway junction several miles from the airport, and Dubliners  refer to it derisively as "the Darndale Hilton.")

There is also another huge housing development called Belmayne nearby which became famous because it was launched by former English Premier League soccer player Jamie Redknapp, and because of the raunchy advertising on giant billboards around the site promising a lifestyle of sex and sophistication if you bought a home  inside.  Half of Belmayne is now a ghost estate, and the developer is bust.

Not far from the Hilton and Belmayne, a complex of 189 apartments called Priory  Hall was built by a developer called Tom McFeely, who happens to be a former IRA man and hunger striker.  We need not make too much out of his IRA past,  although it's certainly interesting that someone who claims to have fought on behalf of the people of Ireland went on to behave as he did towards them.

But McFeely is far from the only developer in Ireland whose work was shoddy and who took shortcuts, although he is certainly one of the worst.

The complex was finished in 2007 and went on sale in two phases at the height of the boom.  The unfashionable location did not affect the prices, with the  apartments costing from €250,000 upwards.
Despite the prices, the apartments were cheaper than on the Southside of the city and were just within reach of a lot of young couples desperate to get on the property ladder.

Yes, they were in a poorer area on the Northside, but they were beside a main road into the city center.  So they sold well (those were the days of 100 percent mortgages) and even the City Council bought 26 of the apartments for social housing.

But there were problems almost straight away.  The new residents soon began to notice that beneath the paint the finish was poor, with cracks appearing in ceilings and floors, damp walls, draughty windows and doors, poor sound insulation, scrappy balconies and a basement carpark that flooded.  Getting the developer to come back and fix things proved to be impossible.

And then problems began to emerge that went far beyond comfort or decorative  issues.  The big problem was the discovery that the developer had failed to follow the fire regulations and the whole place was a fire hazard.  This was so serious that the City Council moved its tenants out of the 26 apartments it owned in 2009.

McFeely was ordered to carry out repairs and upgrades to the privately owned apartments as a matter of urgency to fix the problems and in particular the fire risk.  But by then, as we know, the boom was over and

McFeely had financial problems and said he could not afford to do the work estimated to cost over €7 million.

In 2011, having failed repeatedly to get him to adequately correct the problems in the buildings, the courts ordered that the Priory Hall complex be evacuated and the residents moved to temporary accommodation while the matter was resolved.  The judge in the case was so worried that he ordered that a fire engine be on standby at the complex until the 250-plus residents had all left the buildings.

That was two years ago.  McFeely is now bankrupt and Priory Hall is a derelict  site.

But all the people who bought apartments there have been paying their  mortgages ever since (forced to do so by the banks) for homes they cannot live in.  Instead they are still in "temporary accommodation," most of it paid for by the council, although some former residents are paying rent themselves because they moved to more suitable accommodation.

The council is now challenging in court the ruling that it must go on providing free accommodation which is costing a lot of money it does not have.

For those caught in this situation it is an unbelievable nightmare which has  got even more complicated over the past two years as official Ireland has dodged its responsibility because of the costs involved, and various court actions against McFeely have failed to produce any solution.

The developer has no money, or at least no money anyone can get at.  And all the  branches of official Ireland involved have been passing the unwanted parcel. This includes the state at national level and Dublin City Council at local level, as well as insurers and other bodies.

On paper we have a very high standard of building regulations, laid down at state and local levels.  But it's only on paper.

During the boom there was very poor enforcement of the standards, with less than 10 percent of new builds being inspected by officials in a systematic manner with regular site visits.

Council officials were so stretched they could not keep up.  If they visited at all they had to take the builder's word that behind completed walls, the invisible wiring, plumbing,  insulation and fire stops had followed the rules.

In the case of Priory Hall we now know that was not the case.  The construction and finishing were both unbelievable shoddy -- even dangerous -- as the developer cut corners to maximize profits.

The irony is that throughout the boom the state and local councils raked in money from developers with all kinds of taxes and local charges that the builder had to pay before work could start.  This was meant to be spent by councils on infrastructure (roads, pathways, sewage, etc.) and on funding the proper regulation of all building works by officials.

But as we know both the state and local councils spent a lot of the money on other things, and we are now left with shoddy developments and ghost estates and no money to fix them.

Where Priory Hall was concerned everyone ran for cover.  The developer said he was bust, the council blamed the developer, the state claimed it could do nothing until court actions were concluded, the insurance companies -- including the Homebond guarantee backed by the construction industry -- found reasons why it was not liable to pay up ... and the government did nothing.  

Meanwhile, the lives of the unfortunate people who had bought homes in Priory Hall were destroyed as they struggled to survive and were harassed by the banks to go on paying their mortgages.

For one man, Fiachra Daly, a father of two who had been one of the leaders of the Priory Hall residents in their fight to get something done, it all became too much in July.

More demands from the banks that he and his partner Stephanie Meehan keep up payments on their Priory Hall apartment and the failure of the state to intervene finally pushed him over the edge and he committed suicide.   Stephanie went public with the case and with a letter she had sent to Kenny, emphasizing that he had been a great father and a stable person but had been driven to despair by the impossible situation they were in.

Public anger and disgust at what had happened was palpable, so much so that Kenny made a statement on television on the matter last week.  Doing his Mr. Sincere number, he wagged his finger at the camera and said it was an example of the worst excess of the Celtic Tiger and he insisted that he was going to do something soon ... he just needed a report for himself on the matter and a  little time to consider.  

It was breathtaking. Kenny and the rest of his government have known all about Priory Hall for at least two or three years.

They don't need any reports.  And the court case over who will have to pay for the ongoing temporary accommodation does not stop them from acting either.  

The fact is that the state was as responsible for what went wrong during the largely unregulated building boom as much as individual rogue developers like Tom McFeely.  The state should pay up.

The big unknown in all this, of course, is how many more Priory Halls there are out there, and that is what official  Ireland is afraid of.

In the past week there was further evidence of how little anyone cares when it was revealed that the bank that provided the mortgage to Fiachra and Stephanie had sent another payment demand letter in recent days even though he  had committed suicide in July.  That has since been withdrawn and the remaining debt written off in what the bank called a "tragic" case.

But most people think that only happened because it made front page news.  Meanwhile, Stephanie and her two kids remain in temporary accommodation and their future is uncertain.            

Ireland’s home mortgage crisis persists

Though the property market in Ireland is showing signs of an uptick, 
ghost housing estates are still prevalent in many parts of the country. 

A few weeks ago in this column we were looking at the signs of an end at last to the five-year downward spiral in the Irish property market.

In some areas and for some homes, mainly family size houses in good areas in Dublin, there has been a slight recovery in prices this year, although they are still around half what they were at the peak of the bubble.

That's good news, of course.  For those with money to buy or those with secure state-paid jobs who can get mortgages, the signs that the bottom of the market has been reached are prompting them to act now and not to put off buying a home any longer.

Such activity will help the wheels of the economy to start turning again.  There is even talk that a few new housing estates will be built in Dublin in the coming year to meet demand.

Good news, as I said, but it's important to remember that this is only half the story.
The other half of the story concerns the tens of thousands of people here whose lives have been destroyed by the property crash.

These are the people who bought during the boom and who are in negative equity – their homes are worth far less now than they paid for them a few years ago.  So they can’t sell to pay off their mortgage loan.

Unlike in the U.S., here you still owe the bank even if you give them back the keys.  If you do sell at a loss and give the bank the proceeds, you still owe the bank the difference between the sale price and the loan.  
The property price collapse over the past five years also triggered the crash in the wider economy which means that many people in this situation have also lost their jobs, or their businesses have gone to the wall.  That means they can no longer meet the payments on the huge loans they took out to buy their boom time homes.


The latest figures released two months ago showed that the number of homeowners unable to pay their loans has increased to close to 100,000 mortgage holders who are now 90 days or more behind in their payments.

That is nearly 13 percent of all residential mortgage holders in the country and it’s a huge problem for the banks.   Over half of these are more than a year behind in their payments.

The overhang of bad mortgages means that the banks are effectively bust again despite more than €60 billion having been pumped into them, for which the Irish taxpayer is now on the hook.

Instead of using a big chunk of this €60 billion bailout loan from the IMF/EU to write down the debts of Irish homeowners who simply can’t pay, the banks used most of the money to pay off their bondholders, and what was left was used to start rebuilding their capital reserves.


Part of the €60 billion was supposed to be used to allow solutions for distressed mortgage holders like loan restructuring and partial debt forgiveness.  But that never happened.  Instead, the banks continued to avoid the growing crisis and have continued to threaten and squeeze mortgage holders.


The problem for the banks is that once they accept that someone cannot repay the full amount of their loan, they have to show the loss on their books.  And if they have to do that for half of the 100,000 domestic mortgage holders now in trouble they will have a big problem.


For young families who bought their homes to live in themselves, the situation is an absolute nightmare.  They did not cause the property crash and now they have become the victims of it.  Although everyone has sympathy for them, nothing much has been done to help them.


It’s also hard not to have sympathy for many of the older buy-to-let investors who took out loans to buy a second property as a pension investment and now face the possibility of losing both homes.

Around half of the buy-to-let buyers were on interest only payments for the first few years and now cannot cope as full repayments begin.  It’s estimated that at least 15,000 buy-to-let homes are in this situation and could be repossessed by the banks.


The banks don’t want to repossess homes for two reasons.  In the case of owner-occupier homes such cases are highly emotional and attract very bad publicity for the banks.

Even in the case of buy-to-lets, repossessing so many homes and then putting them on the market could make things worse rather than better for the banks by driving prices downwards again.   And that would mean revaluing their entire mortgage loan books downwards.


The government has been struggling to find a way to sort out this mess.  They tackled the  problem of the billions in bad loans owed by the big property developers by setting up Nama, the state bad bank which bought in the loans from the banks at a discount.

Now they have put a structure in place to try to deal with the domestic mortgage crisis.  But it’s far from clear yet whether it’s going to be much help to the tens of thousands of ordinary people who are in trouble.

The government is tackling the problem in several ways.   Firstly, it ordered the banks to begin offering their customers who are in arrears a long-term solution, and they said they wanted at least 20 percent of cases dealt with by the end of June.


It also brought in new legislation that returned to banks the power to repossess properties, something which had been stopped by a court decision in 2011.

The boss of the country’s biggest bank, AIB, claimed recently that one in five of those in arrears on the bank's books were strategically defaulting and that repossessions were inevitable.  He didn’t produce any evidence for this claim, and he was heavily criticized as a result.

But there is no doubt that at least some people were playing this game, and the government's move on the legislation reflects this.


Various solutions are possible, like split mortgages with part of the loan being parked for 10 years or even much longer, like arrears being capitalized (added to the loan) and the slate wiped clean giving the homeowner another chance, or like the loan reverting to interest only payments.

Or even a system where the bank takes part ownership of the home which will be cashed in at some distant point in the future if the home is sold, but in the meantime the family stays on.  Or where the bank takes full ownership and the family becomes a renter of the home they once owned.

These and other possible solutions are all designed to do one thing -- allow the family to stay in the home.


To help people who are in difficulty the government also set up the new Personal Insolvency Service, a new body licensing debt experts to act as Personal Insolvency Practitioners (PIPs) and Approved Intermediaries (AIs).

These advisers will analyze an individual’s financial circumstances and draw up a debt deal and negotiate with the banks on the homeowner’s behalf.


The new law effectively means that a homeowner threatened with repossession can have the case adjourned so that a PIP can negotiate a personal insolvency arrangement with the bank.

The weakness in this is that the bank does not have to accept a proposed arrangement.  However, it then faces the prospect that the homeowner could decide on bankruptcy, and our law means that does not necessarily mean the person loses their home to the bank.  Plus the time to emerge from bankruptcy here has now been reduced from 12 years to three.


All of this has led to situation that is as chaotic as it is tragic, because no one knows how the government's new structure is going to work in practice, how quickly it will get going and how effective it will be.


For example, the new PIPs have to be approved and qualified, and we don’t know yet where they are suddenly going to spring from.  They will also be charging fees, and there is some concern that the system may develop into another quango which costs a lot of money and does not actually solve the problem.


It’s all supposed to be kicking off next week when the legislation says homeowners will be entitled to send in PIPs to their banks to look for a deal.  But no one here is expecting very much other than more confusion.

Meanwhile, the banks continue to harass frightened homeowners who cannot pay their mortgages.