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Written Answers - Banking Sector Regulation

Thursday, 19 January 2012

Dáil Éireann Debate
Vol. 752 No. 2

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 73.  Deputy Pat Deering Information on Patrick Deering Zoom on Patrick Deering  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  the reason there is such a variation in mortgage interest rates charged by AIB and Permanent TSB, both State owned banks. [3163/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The lending institutions in Ireland, including those in which the State has a significant shareholding, are independent commercial entities.

Ultimately the pricing of financial products, including standard variable mortgage interest rates, is a commercial decision for the management team and board of each lending institution, having due regard to their customers and the impact on profitability, particularly where the cost of funding to each lending institution, including deposit pricing, is under pressure.

Neither the Central Bank nor I have responsibility for any variation in the variable mortgage interest rates charged by the two institutions. However the Central Bank has advised me that, within its existing powers, it will continue to engage with specific lenders which appear to have standard variable rates set disproportionate to their cost of funds.

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