Wednesday 7 December 2016

Bank mortgage profit margins 'not justified'

Published 04/05/2015 | 02:30

Fianna Fáil’s finance spokesman Michael McGrath said ideally markets should fix rates but since this was not happening, the Government should intervene
Fianna Fáil’s finance spokesman Michael McGrath said ideally markets should fix rates but since this was not happening, the Government should intervene

Finance Minister Michael Noonan has said the difference between the rate the banks borrow money at, and the rate at which they lend on to mortgage holders, is "not justified".

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Mr Noonan said he will this week get a detailed Central Bank assessment of all the main lenders' mortgage profit margins. He said the initial view signalled "the margin is not justified".

But the Finance Minister also said that he cannot force banks to cut their variable mortgage interest rates.

He said if the Central Bank recommended he take on such direct powers - he would do it.

"But I will not take it on myself in the Department of Finance because there shouldn't be a political assessment of interest rates," he said on RTÉ's 'The Week in Politics'.

Mr Noonan went on to suggest that he would continue efforts to persuade banks to cut rates. "I'm not threatening anybody. I have a good relationship with all the main lenders and I'll be meeting them all and I'll be discussing this," he said.

Fianna Fáil's finance spokesman Michael McGrath said ideally markets should fix rates but since this was not happening, the Government should intervene.

Irish Independent

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