Michael McGrath (Cork South Central, Fianna Fail)
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In regard to the European Central Bank's opinion on the Bill, in regard to which the witnesses made a number of similar arguments in their presentations today, it was interesting to note that the ECB has acknowledged that in a number of member states there are restrictions on interest rates charged in respect of property. For example, in regard to mortgages, there are restrictions in place in Belgium, Bulgaria, France, Croatia, Hungary, Italy and Poland. One of the ECB's main observations in regard to the Bill is that it does not believe the Central Bank should have a role in competition. That is a point that can be teased out.

However, the ECB also makes the point that in the aforementioned countries the cap on the interest rates is enshrined directly in legislation and that the role of a Central Bank is to come up with a reference or benchmark rate as opposed to what is provided for in this Bill which gives the power to the Central Bank to set a cap following a market assessment. We already have caps on interest rates in Ireland in relation to credit unions, the rate for which is 12% per annum. The Central Bank also has to set a cap in respect of each moneylender's licence. I understand the bank is co-sponsoring a study with Social Finance Ireland on how more restrictions could be placed on the interest rates that can be charged by the money lending sector. There does not seem to be any ideological opposition to having caps on interest rates because they are already in place in some sectors of the economy. If the Central Bank did not have the competition role as set out in the Bill - which can be dealt with by way of amendment - and instead was tasked with devising a methodology for arriving at a reference rate would the bank's position be different and more supportive of the objectives of the Bill?