Ms Isolde Goggin:

I would say that the market is failing consumers in different respects. With our competition hats on, market failure would have a very specific meaning. The problem is that there is a lot of different groups of consumers and the market is not working for them in different ways. The immediate issue, which is what prompted the commitment in the programme for Government and which got us looking at it in the first place, is the relatively high rates for standard variable rate mortgages. This is a cohort of people who have a mortgage and are repaying at an interest rate well above the ECB rate. It is well above what people are paying in other similar jurisdictions. There is another cohort of people who are in arrears and there are non-performing loans. There is also the issue of repossessions and so on, which is a huge problem because it is one of the most traumatic things that can ever happen to somebody. The idea of losing one's home is right up there with bereavement in the stress it causes for people. There is a third cohort, which is a bit invisible, comprising the people who cannot get a mortgage. They cannot get a mortgage because the market is perceived as risky and when a market is perceived as risky the banks will lend to the most secure borrowers. The banks will lend to the people who are looking for a fairly low loan-to-value ratio and they will lend to people on good incomes. They will not lend to people who are on lower incomes or to people who are looking for a higher loan-to-value ratio. This tends to be younger people and those on lower incomes or in more disadvantaged areas.

I will come back to the issue of market failure, but in Ms Goggin's analysis, has the Competition and Consumer Protection Commission seen evidence of individuals who were able to reach the loan-to-value and loan-to-income ratios but the banks still refused to lend to them?