Tom Barry (Cork East, Fine Gael) | Oireachtas source

I am delighted to speak on the motion. First and foremost, everybody wants to see the banks returning to a healthy state and lending normally. While the Minister has no statutory role in regard to the passing on of interest rates in regulated institutions, we need to be part of this discussion.

The issue for many people is not the percentage of the interest rate but the principal of the mortgage itself. Like many others, I remember borrowing at 7.7% for three years on our mortgage. I am not saying anything particular about that except that we were able to borrow a sum that was manageable. We cannot legislate against people with tracker mortgages even if the banks are losing money and they dislike losing that money. It is a situation some people find themselves in and, if they can hold on and pay, that is good for them. The point is that interfering with interest rates that the banks set, while I can see the arguments for it now, might set a dangerous precedent down the road. For example, how do we decide who gets a reduced interest rate? Do we sidetrack issues of security and track record? If we did this, we would enter into a different area.

Every week we see cases of people who have held on until now but who are in huge arrears and afraid of losing their homes. They certainly need to be dealt with. I urge the Government to consider using some of the 30 year money we are getting at just over 1% to finance solutions for these people. In fairness, they are in a very precarious position. There is an argument about someone who is not in arrears and is paying their mortgage at the moment paying a little less, but those in arrears have priority, in my view.

The Strategic Banking Corporation of Ireland, SBCI, is here to promote increased lending, in particular to SMEs and the agri-sector. While I am delighted it is here, I would be very interested to see how much of that money is taken up and how much finds its way down through the system. I will be watching it and we will see the metrics. The challenge is out there for the SBCI to be effective. At times, part of me wonders whether it should go through the pillar banks at all, although that is just my observation. We will see. Perhaps it will work.

Banks need to be profitable. All of us who are banking want to be sure our banks can re-lend to us as we move along. I believe we should be looking at the European rules introduced in the middle of the euro crisis that govern countries' deficits and spending. Ireland is in a position where, due to the situation in the worst years of the recession, we are now being tied back to those previous years of low growth despite our high current growth.

To conclude, this is a very worthwhile debate. I believe more of the recommendations of the Keane report should be implemented. People should be very cautious when banks start trying to mop up equity, as is the case at the moment, and are looking for renewed personal guarantees in regard to perfecting title. These are serious issues and we need to discuss them.

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