This winter Patrick Honohan, the governor of Ireland’s central bank, will be listening out for “jingle mail”. It is something of a novel sound for Europe. During America’s subprime crisis of the past decade, thousands of households escaped from hefty mortgages they could not repay by abandoning their homes – and loans – after posting the keys to the lender (with a jingle).
Until recently that idea was almost entirely unknown on the other side of the Atlantic. In countries such as Ireland, it has always been difficult for individuals to abandon a debt completely, even after default.
But this month Mr Honohan revealed during a debate at the International Monetary Fund that some Irish mortgage providers were now offering “non-recourse” loans, which give them the right to repossess property in the event of default but not to pursue borrowers personally. If these experiments spread, it could change the pattern of mortgages: in future some borrowers could walk away. Jingle mail would have an Irish tone.