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It's time to get tough on banks

FINANCIAL regulator Matthew Elderfield has told the banks to stop raising standard variable rates on mortgages.

The fear is that, in many cases, the banks are putting up these rates to make up for losses they are suffering as a result of much cheaper rates on tracker loans.

The effect of hiking variable rates is to put increased pressure on homeowners when many face reduced pay, rising costs and stealth taxes. The repeated rate hikes are costing 200,000 mortgageholders an average of €120 a month extra.

The Central Bank does not have the power to cap interest rates and Mr Elderfield, a deputy governor of the Central Bank, may well have to seek a public policy response to address the issue.

Is there any sign that the banks are listening? There's little point in appealing to their better nature and "get tough" talk must be backed up by action.