Bloomberg News

Irish Plan Won’t Trigger Mortgage ‘Default Tsunami,’ Glas Says

February 01, 2012

Feb. 1 (Bloomberg) -- Ireland’s proposed personal insolvency laws are unlikely to trigger a “tsunami of mortgage defaults,” according to Glas Securities, the Dublin-based fixed-income firm.

The laws may make banks more active in dealing with home loan arrears, Glas said in a note today. While Glas doesn’t believe this year’s round of bank stress tests will result in a “material change” to bank capital requirements, “it is difficult to gauge the future impact of changes to insolvency legislation and the expected increased focus on arrears resolution mechanisms over the course of 2012,” it said.

The government may seek to stretch out banks’ 2013 deleveraging targets “over a longer period of time and in a more structured manner,” Glas said.

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Dara Doyle at ddoyle1@bloomberg.net


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