I assume the Deputy is referring to the Central Bank’s Economic Letter of 28 March 2013, on The Impact of the Financial Crisis on Banks’ Net Interest Margins. As Minister for Finance, I have no statutory function in relation to setting interest rates by individual lending institutions. While the Government is acutely aware of the increasing financial stress that some households are facing in the current environment, ultimately the pricing of financial products, including standard variable mortgage interest rates, is a commercial decision for the management team and board of each bank, including the banks which the State has a shareholding interest.
The Government does recognise the difficulty an increase in variable mortgage rates can have for some borrowers. However, I can assure the Deputy that the Government is very much aware of the difficulties in this area and it is committed to advancing appropriate measures to assist those mortgage holders who are experiencing real and genuine difficulty.
Building on the 2011 ‘Keane Report’, the Central Bank, under its Mortgage Arrears Resolution Strategies project, has for some time been working intensively with lenders to ensure that they can offer a range of longer term forbearance options to their customers who are experiencing mortgage difficulty. These include Central Bank engagement with the main mortgage lenders to require them to progressively resolve mortgage arrears cases and to, where appropriate, offer sustainable solutions to borrowers. In addition, the full implementation of the new insolvency frameworks will shortly come on stream and the Government also provides mortgage interest supplement support to particular borrowers in difficulty and more general support through the taxation system to mortgaged borrowers.
The Government is making significant progress to address the problem of mortgage arrears and believes that the ingredients of a transparent resolution process for borrowers are now in place.