Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

That is what we are doing. The Minister opened the discussion in terms of Bank of Ireland's rates being excessive, and Bank of Ireland has also introduced fixed term products similar to what other banks have done. I am making the point that the arguments presented heretofore by the Government, which is that we should leave this to it and it will put pressure on the banks, have not worked in some circumstances, and the Minister's response today, in terms of the framework document in place, tells us that it cannot work. He is not going to direct the banks because of that document. Nobody is suggesting he should. The banks do not have to listen to the Minster, even if he goes in with the bata mór and tells them they should reduce their variable interest rates. He is on record for a number of years with regard to that, yet we have stubbornly high interest rates not only in non-State owned banks but banks in which we have significant shares such as Bank of Ireland and those in which we have majority ownership such as Permanent TSB.

If the Minister wants to respond to that he can, but I want to return to the legislation and deal with the Minister's concerns in terms of section 5. He said that permitting the Central Bank to impose a cap on standard variable rates which applies to one lender and not the market could potentially be considered as competitive distortions in the market and would enable the prevention of free movement of services and state aids. Where does that sit in terms of the Central Bank currently having the power to set interest rates for individual providers when it comes to the issue of moneylenders? With regard to moneylenders, the Central Bank has the power and utilises the power, and we can see from its website that different rates are applied to individual companies. The Minister mentioned its potential but it does not lead to the concerns about competitive distortions. It is not a case of one-size-fits all. In a way, we have already done this for financial institutions, if we want to call moneylenders financial institutions, in that the Central Bank has the power to set the maximum interest rate applicable. The interest rates are crazy, and I brought forward legislation on that a number of years ago to stop the Central Bank allowing moneylenders to charge up to 187% APR, but, nonetheless, some of them have APRs less than that and it is deemed to be on an individual case basis. Given the power that already exists under statute and the power the Central Bank has, why is that not considered to be a competitive distortion yet the Minister believes that section 5, which similarly allows him to impose a standard variable rate on one lender but not on the wider market, would potentially result in competitive distortions?