Neither I, nor officials from the Department of Finance have had contact with KBC Bank since 14 December 2011 on the subject of passing on ECB interest rate reductions to mortgage customers. I do not intend to make contact with the Bank on the matter nor will I request my officials to do so. As I stated in my reply to Parliamentary Question No. 159 on 24 January 2012, the lending institutions in Ireland 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 the variable mortgage interest rate charged by the financial institution mentioned by the Deputy. I have no powers to compel the institution to reduce its rates. The Deputy will be aware of the Central Bank's Code of Conduct on Mortgage Arrears, a copy of which can be accessed on www.centralbank.ie.
