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

The Minister may not feel he is in a position to get a response because there is still a week to go. However, I can give a response, which is that, so far, the response from the banks has been deeply disappointing. The fact is a reduction in the fixed rate is not a substitute for a reduction in the standard variable rate. While some customers can make cash savings on their monthly repayments, it comes at a price in that they are locked in for a minimum two-year period. If a new entrant comes into the market and offers variable rates at 3%, they cannot switch because they would have to pay a penalty. This is the point that must be borne in mind. If standard variable rates fall below the fixed rate customers lock in at, then they lose out again.

I do not believe the Minister should accept anything less than reductions in the actual variable rates. The only banks that have responded to some degree so far are AIB in terms of the variable rate and Bank of Ireland with a fixed rate cut, but there is not a dicky-bird - not a word - from the four other banks as to what they are going to do, with just one week to go. We will see what happens in the course of the next week but, on the evidence so far, the response is underwhelming to say the least.

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