As demonstrated by the recent meetings the Tánaiste and I had with the main banks, the Government will continue to work with the banking industry, including the pillar banks, to see if any there are further appropriate measures that can be deployed to ensure that the banks can prudently, sustainably and as cost effectively as possible provide new credit to businesses and households. Also it is essential that all banks comply with all the applicable national and EU banking rules and regulations, including the consumer protection requirements, and that they are accountable to the Central Bank of Ireland in that regard as the independent regulator of the banking and wider regulated financial services industry.
Regarding the issue of interest rates, I am aware that the general level of lending interest rates in Ireland are higher than is the case in many other European countries, though it should also be noted that recent trends indicate that rates have been falling month-on-month. However, it will be important to recognise that there are many factors which influence and determine the level of interest charged on mortgages, business and other loans. These include the fact that the pricing of loans needs to reflect credit risks, funding costs, capital requirements (which in Ireland are elevated due to historical loss experience), the size of the market, the level of market competition and lenders' operating costs.
Nevertheless, it is worth noting that interest rates on fixed rate mortgages have fallen from 4% in January 2015 to 2.7% in March of this year. There have also been reductions in the level of interest rates on loans to SMEs from 5.15% to 4.25% over the period from the first quarter of 2015 to the end of 2019, as well as reductions in interest rates on consumer loans (for example, from 8.3% to 7.23% APRC on consumer loans over the same period). These lower interest rates bring the interest rates available to Irish consumers and businesses closer to the Euro area averages.
In relation to the issue of repossessions, consumers continue to benefit from the protections contained in the Code of Conduct on Mortgage Arrears (CCMA) and I have been advised by the Central Bank that it is committed to regularly reviewing its statutory Codes and ensuring they remain effective. The CCMA provides important protections for borrowers and the objective of this statutory Code is to ensure that regulated entities have fair and transparent processes in place for dealing with borrowers in or facing mortgage arrears. Due regard must be given to the fact that each case is unique and needs to be considered on its own merits. Also all cases must be handled sympathetically and positively by the regulated entity, with the objective at all times of assisting the borrower to meet his or her mortgage obligations. I can assure the Deputy that the protection of borrowers in mortgage arrears continues to be a key priority for the Government and the Central Bank.
