Indeed, I suppose that, despite the challenging times and widespread over-indebtedness, most people in Ireland subscribe to the general proposition that – to quote a recent authority on the need for debtor-friendly insolvency arrangements – “debtors should fulfil their 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” Hence, while long-term debt modification involving permanent debt relief is a necessary ingredient in the resolution of arrears, it is relevant chiefly for cases of over-indebtedness involving or bordering on insolvency.
Other central banks around the world have met the challenge of current conditions with similar innovations.