People in financial difficulty could now find themselves in a ‘nightmare situation’ with their banks warns leading economist

A leading economist claims people in financial difficulty could now find themselves in a ‘nightmare situation’ with their banks.

It’s after yesterday’s decision by the five main banks not to extend mortgage breaks beyond tomorrow.

The scheme was introduced in March to help customers whose jobs were impacted by the pandemic.

Banks say they will continue to offer mortgage breaks on a case-by-case basis – but economist Jim Power says he doesn’t have faith in them noting “Individuals who are in difficulty could find themselves in a potentially nightmare situation with their financial institutions unless there is really strong pressure coming from the Central Bank and government to oversee the process because if left to their own discretion I certainly would not have a lot of confidence in the ability of the banks, or the willingness of the banks, to do the right thing”.

He adds the existing scheme should have been continued saying “I think it is definitely premature to suggest at this juncture that that economic crisis has gone away, I mean we’ve seen local lockdowns in a number of counties so the economic outlook remains incredibly uncertain and I strongly believe that those people who were experiencing mortgage difficulties will continue to experience mortgage difficulties”.