An Irish-based legal rights group has backed calls from the International Monetary Fund (IMF) to banks to help homeowners in Ireland struggling with mortgage arrears as a result of the financial crisis.
Free Legal Advice Centres (Flac) said the recommendation contained in yesterday's statement from the IMF was a recognition of the need for balance.
The IMF said the banks, which have received billions of euro in State aid to recapitalise the system, could afford to help provide narrowly-targeted measures to support homeowners.
"In proposing support for vulnerable homeowners as a priority, the IMF is simply recognising that a serious problem exists and must be addressed in solving the overall economic crisis of the country" said Flac's Noeline Blackwell.
About one in every 25 Irish residential mortgage holders is more than three months behind on their payments, the latest figures have shown.
Ms Blackwell said there was a need for a comprehensive debt settlement system, with mortgage and personal debt closely linked.
"Flac is not alone in pointing out that the bankruptcy and insolvency regime in Ireland is antiquated and hopelessly out of date" she said. "The Law Reform Commission has also identified the need for reform in this area."
Labour's finance spokeswoman Joan Burton said the IMF's comments were welcome.
"With unemployment at record levels, incomes under pressure, and negative equity the new reality for many, people are simply terrified of losing the roof over their heads," she said.
The IMF also recommended an orderly sell-off of assets held by Nama to reduce the overhang of property in State hands. Ms Burton called for the Government to publish Nama's revised business plan.
"Only then will be able to establish whether an orderly disposal of assets, particularly overseas assets, is on the horizon," she said.
Goodbody analyst Ken Darmody said bank levies could be introduced as a result of the financial crisis.
"Bank levies are another topical point given the week we are in, and the IMF believe one should be considered here. It is probably only a matter of time before we see one here in Ireland, though expect it to remain on the back burner ahead of the recapitalisation of the financial system," he wrote in a note for investors.
