bring it back under control. in any event, it is not an option for ireland. the burden of some of this debt has been partly mitigated by the low - for - long interest rate policy of the ecb – its policy rate has averaged well below 1 per cent for the past 5 years – which has brought the servicing costs of tracker mortgages well below where they were when the loans were contracted. another category often mentioned are retired persons whose wealth was concentrated as was traditional on long - standing holdings of bank equity. bis central bankers ’ speeches because it too reached the limit of its debt capacity ( for the reasons mentioned above ), the government has little room left for policies involving net additional spending, so in practice it is limited to broadly cost - neutral adjustments to tax and spending. along with this limited capacity, there has been little appetite for a transfer from taxpayers to those indebted households who can still afford to service their debts. personal insolvency legislation has, however, been modernised and streamlined, offering viable options for over - indebted borrowers. ideally, though, lenders should be, and increasingly are, negotiating more favourable arrangements than bankruptcy that restore borrowers to a sustainable position, while husbanding ( as is their responsibility ) the capital of the bank and avoiding unwarranted losses from concessions to borrowers that can afford to pay – concessions that would largely fall on the banking system ’ s largest shareholder, the state. i need hardly recall that walking this tightrope has been a very slow process. some home - owners have seen their income situation deteriorate to the point where they can no longer afford to service the mortgage debt. fortunately, the number of involuntary owneroccupier repossessions has so far remained low : given the sharp fall in property prices between 2007 and 2012, it can make sense for lenders to avoid repossession even for a homeowner who can no longer fully service the original debt. banks have been pressured by the central bank, within the limitations of prudential regulation and their constitutional property rights, to accelerate the conclusion of sustainable loan modification solutions where the existing contracts are no longer viable. gradually – too gradually – we are seeing progress on this front. banks are obliged to comply with the central bank ’ s code of conduct on mortgage arrears in arriving at sustainable solutions in a fair and transparent way. this remains a focus of our close attention at the central bank. indeed,

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