Dáil Éireann Debate, Wednesday - 30 January 2008
119 Deputy Joan Burton asked the Tánaiste and Minister for Finance the number and value of savings accounts; the breakdown of the value and number of saving/deposit accounts of less than €20,000, between €20,000 and €50,000 and over €50,000 on deposit with banks, financial institutions and credit unions here; and if he will make a statement on the matter. [2345/08]
View answerMy Department has been informed by the Central Bank and Financial Services Authority of Ireland (CBFSAI) that the level of deposits, owned by Irish residents, amounts to approximately €178 billion. This is an aggregate figure based on the Central Bank Monthly Statistics up to the end of November 2007. As regards the number of deposits, the CBFSAI surveys banks and financial institutions on a number of items including the number of deposits. The results of the 2007 survey (based on 2006 information) conducted by the CBFSAI indicates that there were approximately 8 million deposits owned by Irish residents. The Registrar of Credit Unions has also advised my Department that 2.85m credit union members held €12.4 billion of savings in Irish credit unions as of 30 June 2007.
As far as the disaggregated data is concerned, as this has not been collected by the CBFSAI or the Registrar of Credit Unions as a matter of routine, the information requested by the Deputy is not available at the present time. However, I am informed that as part of the work being undertaken to contribute to the EU review (to be completed by mid-2008) of the framework for deposit protection, the CBFSAI has commenced a process to survey the market. This will yield information on the number of deposits in various ranges.
The work carried out on this review and its conclusions will be important inputs to the process of ensuring that arrangements to safeguard financial stability in Ireland continue to conform to international best practice standards.
120 Deputy Michael D. Higgins asked the Tánaiste and Minister for Finance his views on recent housing data from the Department of the Environment, Heritage and Local Government showing that the number of interest only mortgages approved has trebled from approximately 5% in early 2004 to 16% in the third quarter of 2007; if he is satisfied that the necessary processes are in place in financial institutions to protect mortgages holders; if he has had discussions with the Central Bank or Financial Regulator regarding this issue; and if he will make a statement on the matter. [2350/08]
View answerWhile the choice of mortgage product ultimately rests with the individual customer and the lending institution concerned, as Minister for Finance, I have consistently highlighted the need for responsible behaviour by both borrowers and lenders and in particular the need to factor into their financial decision making the effects of potential future changes in economic and financial conditions.
Under the legislative framework for the regulation of financial services, the Financial Regulator has a statutory mandate to safeguard the interests of consumers. Under its Consumer Protection Code, the Financial Regulator has introduced a broad range of consumer protection measures relating to the sale of financial products, including mortgages. These measures include suitability tests, know your customer fact finding and the provision of sufficient information to customers. In addition, from 1 January 2007 staff providing advice or selling mortgage loans must meet minimum competency requirements laid down by the Financial Regulator.
The Financial Regulator publishes a guide called "Mortgages made Easy" available on its website or from its Consumer Information Office which stresses all the issues that need to be taken into consideration by consumers when deciding on the type of mortgage which suits their personal circumstances best.
The information being made available by the Financial Regulator, together with statutory information and warnings in the case of mortgages under the Consumer Credit Act, 1995 serve as an adequate basis for consumers to make a decision about the type of mortgage which best suits their financial needs. It is obviously important in making such decisions that both prospective borrowers and lenders are highly cognisant of the prospect of changes in economic and financial conditions particularly over the long time horizon applicable to a mortgage.
In terms of both prudential supervision and safeguarding the interests of consumers, I would like to reiterate the point the Financial Regulator has made many times before that there is a clear onus on the boards and management of individual institutions to ensure that they maintain prudent lending standards. The Financial Regulator continues to scrutinise banks' lending policies as part of its ongoing supervisory activity.
Finally, in assessing the statistics referred to by the Deputy it is important to make the point that the data published by the Department of the Environment, Heritage and Local Government refers to new loans approved by credit institutions and, therefore, it does not capture changes to these loans such as when the borrower commences to repay capital, whether on a regular or once-off basis.
