of over - indebtedness. meanwhile we at the central bank will not shirk our responsibility to do what is in our power to deliver on our mandate to protect the new generation establishing households – and the nation at large – from the risk of a repetition of what happened before. we seek to do so with the minimum of adverse side - effects. dealing with over - indebtedness let me turn now, though, to the ex post problem ; dealing with over - indebtedness. while mortgage indebtedness accounts for by far the biggest volume of debt, in terms of the numbers of people affected, debt problems are not actually as concentrated in the mortgage sector as is often thought. the 2012 survey on income and living conditions ( silc ) showed that about 22 % of local authority renters cited debt repayments as a “ heavy burden ” – the same percentage as for mortgage debtors. ( in both cases the percentages are of course much larger than before the crisis ). likewise for the percentages of households reporting payments arrears – though in this respect the experience of local authority renters was almost as bad in 2006. i am not going to wring my hands yet again in acknowledgement of the long - drawn out nature of the resolution of this problem. you know all too well at first hand the debilitating effect on families who have been trying to cope with over - indebtedness – something which has affected a much wider and more diverse segment of society than at any time in our history. unresolved over - indebtedness also has a first - order effect on the performance of the economy. i am not only referring here to the constraints which high household indebtedness place on aggregate consumer spending. this is a point which has been emphasised in an influential recent book by mian and sufi7 who, despite their concentration on the united states ( which has also been slow to find the right solution for their – proportionally less acute – mortgage overindebtedness problem ), point out the cross - country evidence of contraction in aggregate consumer spending in the downturn being related to the level of household indebtedness, with ireland being one of the top two exemplar countries. in addition, though, an overhang of debt in a household can have the effect of chilling all initiative and discouraging enterprise, and in other ways impeding the economic recovery. finding – or better implementing – work

##able ways of addressing this unprecedented problem will continue to challenge the institutions of state in all sorts of ways. guiding principles the reformed legislation on personal insolvency has brought a degree of clarity and, i believe, convergence of the law with irish society ’ s expectations regarding over - indebtedness. while offering significant new channels of relief to the over - indebted, the legislation also reflects a general societal adherence to what has long been generally regarded as “ a cornerstone of the european approach to over - indebtedness relief … [ namely ] … that debtors should fulfil their atif mian and amir sufi, house of debt ( university of chicago press, 2014 ). the impact of high indebtedness on household spending in ireland has been analysed recently by yvonne mccarthy and kieran mcquinn, “ deleveraging in a highly indebted property market : who does it and are there implications for household consumption? ” central bank of ireland technical paper 05rt14, 2014. bis central bankers ’ speeches obligations if at all possible, and freedom from legitimately incurred obligations is a privilege, potentially subject to abuse, that should therefore be a carefully guarded last resort ” 8. the insolvency legislation includes innovations with respect to the treatment of secured debt which – even though they retain considerable voting power in respect of personal insolvency arrangements – lenders have found controversial. despite some teething problems in its implementation ( which i trust will continue to be ironed out ), i believe that the main features of the new personal insolvency framework do provide a broadly accepted formal legal framework consistent with this cornerstone for cases where borrowers are unable to pay. it goes some way to addressing the imbalance of power that is often inherent in the creditor - debtor relationship. it should also provide a reference point for borrower - lender negotiations outside of the framework itself, though as mentioned i know that many of you remain sceptical about its effectiveness in this regard. finding acceptable solutions hampering these borrower - lender negotiations are suspicion and fear of making concessions that are more costly than they seem. for the lender, the fear is that concessions to one under - water borrower may trigger strategic behaviour on the part of others who might masquerade as less solvent than they really are. this has certainly deterred banks from offering more definitive debt relief in many cases. it is a pity that the banks still do