Dáil Éireann Debate, Wednesday - 22 February 2012
13 Deputy Michael McGrath asked the Minister for Finance if he intends to raise with Permanent TSB the issue of the standard variable interest rate it charges on residential mortgages which, at 5.19%, is over 2% higher than the 3.04% charged by another State owned bank, AIB. [9889/12]
View answerThe 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 any responsibility for any variation in the variable mortgage interest rates charged by the two institutions referred to by the Deputy. 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.
