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Elderfield lays into banks

FINANCIAL regulator Matthew Elderfield has come down heavily on banks increasing standard variable rates on mortgages.

Chief executives of AIB, Bank of Ireland, EBS, Permanent TSB, Ulster Bank and KBC met with Mr Elderfield this week.

It is expected that he will put additional pressure on the banks to cut rates in line with any ECB rate reductions.

Around 200,000 householders with variable rate mortgages are being hit with repeated rate hikes as banks try to recoup losses.

The rising costs for homeowners on standard variable rates is adding to the problem of mortgage arrears and Mr Elderfield has echoed these concerns.

It is believed that the banks are pushing their standard variable rates to compensate for losses they have been hit with after offering much cheaper tracker loans. The regulator has told bank chief executives that if they do not comply with his request, they face imposed restrictions on their ability to increase rates.

The Central Bank does not have the power to cap interest rates.

But Mr Elderfield is believed to be considering seeking a public policy response to address the issue. Today, he will address the issue of mortgage arrears at a conference hosted by the Association of Compliance Officers in UCC.