Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I can confirm that I last met the CEOs and senior management of the each of the banks last July when we discussed, among other matters, the issues included in the Deputy's question. I also met the CEO of Permanent TSB in the past month. In addition to my own meetings with the banks, officials in my Department meet senior management of each of the banks each month at least. The agendas for these meetings are wide-ranging and typically include updates on mortgage arrears, lending volumes across all portfolios, product pricing and profitability. My officials keep me briefed on these developments.

On the specific question of mortgage arrears, the banks' arrears management teams provide updates on current trends and initiatives being taken by the banks to assist customers in financial difficulty and the distressed credit environment in general. In the case of SMEs, AIB and Bank of Ireland submit their lending plans to the Department and the Credit Review Office at the beginning of each year. The banks also meet the Department and the Credit Review Office every quarter to discuss progress. The Credit Review Office is also available to review cases where credit facilities up to €3 million are refused, withdrawn or offered on unreasonable conditions. There are more than €2 billion of State supports available in the SME and farming sector, including large supports from Enterprise Ireland and the Irish Strategic Investment Fund.

On the topic of variable interest rates, the Deputy may be aware that this was subject to lengthy discussions with the banks' CEOs at the most recent meetings of the Joint Committee on Finance, Public Expenditure and Reform. At those meetings the banks pointed out that in comparing the standard variable rate mortgage margin of Irish banks with other jurisdictions, it is important to understand that the difference reflects many factors and loss experience, in particular, which determines the capital that must be held against these loans. In recent years this has obviously been very different for Irish banks compared with their counterparts in other European countries. Funding models also differ between Ireland and other countries. They pointed out the shortcomings of comparing mortgage rates against short-term ECB funding rates, given the significant liquidity risk which is a feature of mortgages that typically have a 20-year term.

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