AIB to offer some debt forgiveness

AIB have said that they intend to offer debt forgiveness in some cases. The Bank intends to deal with cases “in a more industrialised fashion than seen before”. This is good news as a whole as it is a clear indication that finally at least one bank is going to serious tackle the debt crisis. 

The country cannot move forward and pull itself out of its economic difficulties until the debt crisis is dealt with. Hopefully more banks will do the same so the debt crisis can be resolved and employment can be created in sufficient numbers to make a difference.

I think it would be wrong for everyone to believe that they can now expect their loans to be reduced. As stated by the bank “It is clear that any such arrangements can only apply to those who truly cannot pay as opposed to those who will not pay and that there cannot be wholesale debt forgiveness,”

The bank is going to tackle the problem with the bank and it shareholder interests in mind also. Debt forgiveness will be where the best interest of the banks is being served. This is a realistic approach. The approach of no debt forgiveness at all costs cannot work as a level of debt forgiveness is needed in some cases as part of a solution to such as large crisis.  When you cannot get blood from a stone, squeezing the stone further is pointless.

The bank have a team of about 2000 staff to start to tackle the debt crisis and are also lining up estate agents to sell properties which will have to be put on the market for sale. This is a key part tackling the crisis and moving on. Many properties have to be sold and the market needs to get back to some level of normality.

The most important point in what AIB have said is that they are going to being to actually tackle the problem and will be taking a pragmatic approach to doing so. Although the Central Bank have had to push for action and the New Insolvency Bill will have played its’ part, AIB should be commended for taking this big step forward.