Micheál Martin (Cork South Central, Fianna Fail)

On 3 November, the new President of the European Central Bank, Mr. Mario Draghi, announced a cut in the bank's main policy rate from 1.5% to 1.25%. This was as result of what he described as a mild recession looming for the eurozone by the end of the year. The Minister for Finance, Deputy Noonan, rightly responded to the rate cut last week by stating the banks obviously should pass on the cut to both tracker mortgage customers and those holding standard variable rate mortgages. The Central Bank also put pressure on lenders to pass on the rate cut to all mortgage borrowers. However, tens of thousands of variable rate mortgage holders still do not know whether their lenders will pass on the interest rate reduction from the bank. Some banks already have indicated they will do so but others have indicated clearly the opposite. The Danske Bank-owned National Irish Bank as well as Ulster Bank have stated they will not be passing on the ECB's latest rate reduction. Alarmingly, National Irish Bank has just confirmed that not only is it not passing on the rate cut but it intends to raise its variable mortgage interest rate by up to 0.95% next Friday. Surprisingly, Bank of Ireland and Allied Irish Banks have failed to indicate whether they intend to follow suit. We are all aware of what banks are obliged to do by contract and what they have discretion over. However, the Taoiseach said he would consider changing legislation if lenders failed to pass on rate reductions. As he knows, the Financial Regulator has been saying this for some months now. The Taoiseach indicated that he would see what headway the Financial Regulator would make - I think he used the phrase "we will wait and see" how the regulator gets on. I suggest that the time to "wait and see" is now well and truly over. Mortgage holders need to see urgent action by the Government on a number of fronts. The Taoiseach indicated that the banks would be forced to absorb interest rate rises rather than customers.

What work has the Taoiseach done in the intervening months in regard to the preparation of legislation to require banks to pass on mortgage rate reductions? If there is such work, when can we expect its publication?

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