Derek Keating (Dublin Mid West, Fine Gael)
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Question 89: To ask the Minister for Finance the reason a State-owned bank, PTSB, is charging its standard variable rate customers 6.5% APR which may be reduced to 5.9% after the ECB rate is implemented who are being funded in large part by the European Central Bank which is currently charging them 1.25%; if he has asked the board to review the interest rate charged; if he has asked the Central Bank of Ireland to assess the means by which PTSB sets SVRs; the reason rate charged by the State owned bank is higher than the rate charged by all the non-State owned banks including the Bank of Ireland, Ulster Bank and others; and if he will make a statement on the matter. [39516/11]

Michael Noonan (Limerick City, Fine Gael)
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I have not asked the PTSB board to review its mortgage interest rates. Neither the Central Bank nor I, as Minister for Finance, have a statutory role in the setting of interest rates charged or paid by financial institutions regulated by the Central Bank. Ultimately, the pricing of financial products, including variable mortgage interest rates, is a commercial decision for the respective management teams and boards of the banks having given due regard to its customers and the impact on the profitability of the bank, particularly as their cost of funding, including deposit pricing, is under pressure. The Central Bank has informed me that, using its existing powers, it will engage with lenders that appear to have standard variable mortgage rates set disproportionate to their cost of funds. Credit institutions are not primarily or always funded from the ECB, but rather from a wide variety of sources. In relation to the current rates charged by PTSB, I understand it will charge 5.19% on all standard variable rates following the ECB rate cut on 8 December 2011.