access for debtors to each of these systems is subject to a number of conditions. the conditions for a debt relief certificate, which is aimed at allowing people to resolve their unmanageable unsecured debt, include that the debtor ’ s net monthly disposable income after provision for reasonable living expenses must be €60 or less and that their assets be €400 or less. under a debt settlement arrangement debtors who have income, assets and unsecured debts above these thresholds can apply for a protective certificate which will provide a standstill period of 30 days in which the creditors cannot take action against the debtor but will consider a repayment plan put forward by a personal insolvency trustee. if creditors representing 65 % of the value of the debt agree to this plan it will become binding on all creditors and a debt settlement agreement will be registered by the insolvency service. when the payments agreed under the debt settlement agreement are successfully concluded, the balance of unsecured debt remaining will then be written off. a personal insolvency arrangement will cover situations where debtors have both secured and unsecured debts above €20, 000 but below €3 million. it will apply where a debtor is cash flow insolvent – or unable to pay their debts in full as they fall due – and is unlikely to become solvent in the foreseeable future. it involves a personal insolvency trustee advising the debtor, proposing a repayment plan to creditors and, if accepted, administering this personal insolvency arrangement for its duration. this arrangement, which will normally run for six years, must be supported by at least 65 % of creditors and at least 75 % of secured creditors and 55 % of unsecured creditors in value terms. there are also a number of reforms of the bankruptcy act proposed, including changes to the automatic discharge period. while the actual legislation is not likely to come in force for a little while yet, having clarity on the policy framework for bankruptcy and debt settlement is extremely important and very welcome. there is now more certainty for borrowers and lenders alike about the consequences of non - payment and failure to reach agreement under the mortgage arrears resolution process. mortgage arrears resolution strategies the code, the keane report and bankruptcy law reforms provide the policy framework for addressing the mortgage arrears problem. but towards the end of last year, the central bank was increasingly concerned over the progress that the banks were

later this year. we will also be gearing up for the next pcar stress test of the banks in the autumn, developing our methodology. we will again be using a third party to assist in an independent assessment of the banks ’ loan losses. following a public tender process, blackrock solutions has been awarded the contract for this exercise. over time then, the central bank will be able to use the strategies ( and the lenders further refinement of those ) as a mechanism to build up a better picture of progress on the arrears issue, to provide feedback on good and bad practice, to track operational progress against strategy targets and, as i promised last autumn, to breath down the necks of the banks where necessary to do a better job. conclusion there are a lot of different factors that will come together to determine the ultimate resolution of the mortgage arrears problem – economic, policy and social – not all of which are within the influence of the central bank. now that the public policy framework for mortgage arrears is mostly settled, the central bank is pressing hard for operational improvements at the banks so that arrears cases are handled in a way that meets consumer protection concerns and faces up to the unsustainable mortgage problem, but also prudently husbands the capital that has often come from the taxpayer. i hope i have given you a clear picture of the bis central bankers ’ speeches immediate priorities of this work – unsustainable mortgages, buy to let arrears, operational capacity and negative equity mortgages – and a sense of what is coming in the future. and, as i have explained, the next stress test in the autumn will provide an updated view on the capital adequacy position of the banks – and therefore the financial stability position of the country – arising from the developing mortgage arrears situation. the link between the mortgage arrears problem and the prospects of overall financial recovery and stability are obvious. it means that the borderline insolvent homeowners who genuinely can ’ t afford to pay back all their mortgage should get help. but it also means that those who can afford to pay continue to do so. and it means that those who can afford to pay but won ’ t – thereby unfairly adding to the costs to the taxpayer by taking advantage of the current situation – they need to face up to their responsibilities. it is important that borrowers engage with their banks early in an open and honest way. this is