Bernard Durkan (Kildare North, Fine Gael)
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Question 169: To ask the Minister for Finance the manner in which Ireland's Central Bank liaised with the ECB in the course of the past ten years; if any particular issues arose which might have indicated the necessity for corrective measures in respect of banking here or throughout the Eurozone; if the Central Bank here identified any weaknesses in the banking sector here which were brought to the attention of the ECB and conversely if the ECB identified any issues in the banking sector which requires the attention of the Central Bank; and if he will make a statement on the matter. [34826/11]

Michael Noonan (Limerick City, Fine Gael)
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As Minister for Finance, I have no function in the relationship between the European Central Bank and national central banks. The Governor of the Central Bank carries out his European Central Bank-related functions under the Treaty of Rome and the Statute of the European System of Central Banks (ESCB) and his independence in doing so is guaranteed. Section 19A (2) of the Act provides that the Governor has sole responsibility for the performance of the functions imposed, and the exercise of powers conferred, on the Bank by or under the Rome Treaty or the ESCB Statute.

Section 6A (3) of the Central Bank Act 1942 provides that the Minister for Finance may not request information relating to ESCB functions from the Governor or the Bank.

Additionally, article 282 (3) of the Treaty of Rome provides that the European Central Bank shall be independent in the exercise of its powers and that European Union institutions, bodies, offices and agencies and the governments of the Member States shall respect that independence.

Bernard Durkan (Kildare North, Fine Gael)
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Question 170: To ask the Minister for Finance the extent to which it is expected that recent ECB interest rate will be passed on to the borrower with particular reference to lending institutions that have passed on rate increases to the borrowers; and if he will make a statement on the matter. [34827/11]

Michael Noonan (Limerick City, Fine Gael)
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I understand that the recent reduction in interest rates announced by the ECB have been passed on by three lenders, namely Irish Life and Permanent, AIB and EBS. The Government wants the lending institutions to pass on the interest rate cut for a number of reasons. Firstly, the interest rate cut will be of important assistance to mortgage holders who are struggling to pay their mortgages. Secondly, and linked to the first reason, the purpose of the ECB's interest rate cut was a monetary policy measure to increase the level of money in the Eurozone so as to stave off a recession. The ECB did not cut rates so as to allow lenders to rebuild their capital base - there are other methods for this to occur.

Neither the Central Bank nor myself, as Minister for Finance, have any statutory role in the interest rates charged by financial institutions regulated by the Central Bank. However the Central Bank have advised me that they will engage with lenders which appear to have standard variable rates set disproportionate to their cost of funds.