Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Question 176: To ask the Minister for Finance if he has asked Allied Irish Bank to consider the wider economic implications of reports that the bank intends to raise its lending rates on a number of products; and if he will make a statement on the matter. [30783/12]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

As the Deputy will be aware, the Bank's policy in relation to lending rates is a matter for the management and board of the institution. I have no role in the day-to-day commercial and operational decisions of the banks, which include these matters. These decisions are taken by the board and management of the institution. Notwithstanding the fact that the State is a significant shareholder in the institution, I must ensure that the bank is run on a commercial, cost effective and independent basis to ensure the value of the bank as an asset to the State, as per the Memorandum on Economic and Financial Policies agreed with the EU Commission, the ECB and the IMF.

The Government and AIB are acutely aware of the social and economic impacts that any lending rate increases may have in the current environment. However, the bank has informed me that many of its lending products are currently priced below peers.