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

I do not have a role in the commercial decisions of either bank. The State owns 99.8% of AIB, vested in me, but that does not allow me to intervene in commercial decisions made by the bank. Similarly, the State's 14% stake in Bank of Ireland does not allow me to intervene in its commercial decisions. Obviously, I have a certain moral suasion role. An example of how it works was highlighted in response to the previous question in the name of Deputy Michael McGrath. The new practices Bank of Ireland was proposing to impose on customers in withdrawing money in its branches were totally out of line with our expectations. I issued a very strong statement and the bank reacted immediately. I have that influence. The fixing of interest rates is a matter for individual banks; it is not one for the Cental Bank or me. The answer is to have competition in the system.

That is why I want different products at different prices offered by different banks. I do not want in any circumstance to have the same set of products all priced evenly, as if that was to happen, there would be no competition at all. I would like to attract other lenders to the country on the mortgage side, but that is quite difficult because of the legacy of mortgages in arrears in a country where enforcement involves a long legal process. New banks are, therefore, reluctant to come.

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