Tuesday, 28 June 2011
Department of Finance
Question 89: To ask the Minister for Finance his views on State supported financial institutions increasing interest rates on mortgages outside of European Central Bank rate changes; his views that this is unfairly treating depositors over mortgage holders; and if he will make a statement on the matter. [16988/11]
The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. The interest rate charged to customers is determined by a broad range of factors including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution's overall funding. A balance must be maintained by the Government between support provided for individual banks and financial service providers generally through the bank guarantee scheme, other financial support incentives and broader public policy provisions, while at the same time ensuring that the day to day running of these institutions has regard to competition, market conditions and the need to develop stable commercial enterprises to meet the long term credit needs of households and businesses in the Irish economy.