Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I welcome the fact the Minister is going to take up the issue directly with the Governor of the Central Bank. I have made it clear that I fully accept that neither the Government nor the Central Bank set interest rates, but they have significant influence. The Minister is in an influential position, as is the Governor of the Central Bank who has a key role in terms of consumer protection. There is no doubt but that the variable rates being charged to existing customers are way out of line with the cost of funds the banks currently face. As the Minister knows well, the cost of funds is at an historic low, with the ECB base rate at 0.05%, the cost of funds on the wholesale interbank markets exceptionally low and the level of interest being paid to savers and depositors is very low. Where banks are accessing funds, they are doing it exceptionally cheaply. I welcome the fact the Minister is going to take up the issue with the Governor and hope he will bring his influence to bear on the banks and that this will result in further downward pressure, particularly for the 300,000 existing customers, many of whom have not benefited at all from the recent announcement of rate reductions.

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