Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

We have a problem with competition in the banking sector. One can make the case that to take action on this issue would encourage competition among the banks.

The problem is they are not competing. As they are dominating the market, there is a need for the Central Bank or the Government to act. I do not have the time to tease out the matter further.

On the consultation being carried out, my view, whether it is right or wrong, is that the Central Bank got one over on the Government. The Government was going to increase loan to value ratios with its guarantee scheme, with no mention of introducing the mandatory loan to value ratios the Central Bank has issued. The Government has now announced its plan. I will participate in the consultation, but it is very difficult to make a proper submission, given that there are two plans, one of which is the Central Bank's loan to value ratio, while the other is a mortgage guarantee. The mortgage guarantee will not be in place for January. I know that we are in consultation mode, but people are panicked and do not know what is happening. Professor Honohan mentioned a figure of 80%, but now he is suggesting rowing back on it and that we consider a mortgage guarantee. It appears that this must be kicked to touch for a couple of months until both processes are able to move forward and align with each other. In the middle of all of this he has issued a warning to the banks, rightly so, that if they start increasing loan to value ratios at this point, the Central Bank will be keeping an eye on the issue. What is the position? It appears to be a mess.