Sunday 4 December 2016

Noonan insists banks will feel pressure over variable rates

Published 06/05/2015 | 02:30

Michael Noonan
Michael Noonan

Finance Minister Michael Noonan says he will not accept excuses from banks that refuse to pass on interest rate reductions to variable mortgage customers.

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Mr Noonan said he expected to receive a report from Central Bank Governor Patrick Honohan on the issue of variable rates in the coming days.

He told reporters the analysis will detail the "margin that will be justified" in relation to mortgage rates.

Mr Noonan will then present the findings at a meeting with the six main financial institutions later this month.

"If they continue to say no, we'll continue to keep talking," Mr Noonan said.

Bank of Ireland and Ulster Bank last week both gave no indication of following AIB in passing on variable rate reductions.

Ulster Bank boss Jim Brown told TDs and senators that its standard variable rate is "not overpriced". While Bank of Ireland said while it kept rates under review, it couldn't give any commitment.

In response, the Taoiseach said their position was "unacceptable".

Meanwhile, Mr Noonan yesterday played down reports that repossessions have soared.

New figures from the Courts Service this week show that 586 repossession orders were granted by the Circuit Court in the first three months of the year.

That is compared with 95 in the same period last year.

Deadline

But Mr Noonan yesterday said the figures "weren't actually repossessions" and were in fact notices brought before the courts.

"Of course, we knew that there was a tranche of people that weren't engaging with their lenders, and that the banks and building societies and lenders were issuing court orders to get them to engage," Mr Noonan said.

He said he believed that the Oireachtas Finance Committee should be given an eight-week deadline in examining the merits of reducing the bankruptcy term from three years to one.

Irish Independent

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