Joan Burton (Dublin West, Labour) | Oireachtas source

I welcome our friends from the Bundestag in Germany. We had a banking collapse, which people know happened on the watch of the Deputy's party and cost the country much money. We are in the process of recovering much of that. Nonetheless, a strong element in the portfolio of lending built up by the banks comprises tracker mortgages on which the banks are losing money. Part of the action of banks in their charges for standard variable rate mortgages is to seek to recover, as the Deputy suggested, costs from the losses incurred with respect to tracker mortgages. No doubt, there may yet be action that could be taken within a European context, with the agreement of our German friends, with regard to the tracker mortgage issue that could provide some relief into the Irish banking system. That is a wider issue and not the subject of the question.

The standard variable rate mortgage rates are excessive in terms of cost and I have said that on a number of occasions. In recent days, the Minister for Finance and the Governor of the Central Bank have met on mortgage issues. I understand that at their meeting, the issue of mortgage interest rates was discussed. There are issues for the banks both with respect to tracker and standard variable rate mortgages. The Governor provided an update to the Minister on the ongoing research that he and his officials are carrying out on the issue of the standard variable rate charges. The Governor and the Minister noted that the standard variable rates charged in Ireland are higher than other euro area countries and have not fallen in line with European Central Bank wholesale rates.

The Central Bank has submitted its research to the Department of Finance and it is expected to be dealt with in the next few days. The Minister, Deputy Noonan, and his officials will review the research ahead of meeting representatives of the six main mortgage lenders in the coming weeks. I have advised the main banks that they need to consider their pricing policies with respect to standard variable rate mortgage holders. If they are not inclined to listen to the difficulties that people are facing as a consequence of their pricing policies, there are other mechanisms of addressing this.

I have referenced that before. Given that the Irish taxpayer bailed them out for extraordinary amounts following Fianna Fáil's actions, the banks would be wise to listen to the advice in relation to their pricing policies and to provide better deals for their customers.

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