IRELAND’S PERSONAL insolvency regime is set for an overhaul, with legislation being drafted to reform the antiquated bankruptcy laws.
In a revised rescue deal with the European Union and International Monetary Fund, the Government has agreed to address weaknesses in the personal bankruptcy system. The Bankruptcy Act is to be significantly amended, and a non-judicial debt settlement and enforcement system introduced to provide an alternative to court-supervised proceedings.
In a draft memorandum on economic and financial policy, the Government has also set out its intention to develop a legal framework to allow for the collection of financial data on all borrowers for the first time. It is envisaged this will facilitate banks in making sound credit decisions.
Meanwhile, the Government has committed to reducing the costs of Nama’s operations. It will also have to contribute to the revival of the property market by meeting asset disposal targets – selling 25 per cent of its assets by the end of 2013, for instance.
Credit unions face greater scrutiny, with a stress test of the sector under way. Greater consolidation will be sought by the Government, and institutions will face stiffer regulatory and governance requirements. A commission will be established by the end of May to draw up a strategy for the future development of the sector.
As part of the winding down unviable banks, an independent advisor is validating the methodologies used to estimate the future credit losses at Anglo Irish Bank. The advisor is also carrying out a three-year and lifetime loan loss forecast for Irish Nationwide Building Society.
