Michael McGrath (Cork South Central, Fianna Fail)
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69. To ask the Minister for Finance his views on whether or not the banks operating here should pass on the recent ECB interest rate reduction to mortgage holders on standard variable rates and small and medium enterprise loan customers also on standard variable rate; and if he will make a statement on the matter. [25110/14]

Michael Noonan (Limerick City, Fine Gael)
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Firstly, I must confirm to the Deputy that the lending institutions in Ireland, including those in which the State has a significant shareholding, are independent commercial entities. I have no statutory role in relation to regulated financial institutions passing on the European Central Bank interest rate cut to small and medium enterprise (SME s) loan customers or in relation to the mortgage interest rates charged to consumers.  It is a commercial matter for each institution concerned.  It is not appropriate for me, as Minister for Finance, to comment on or become involved in the detailed loan position of SME s or consumers.

The Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations.  The Central Bank has no statutory role in the setting of interest rates by financial institutions, apart from the interest rate cap imposed on the credit union sector in accordance with the provisions of the Credit Union Act, 1997.

The interest rates that financial institutions operating in Ireland charge to SME s and customers are determined as a result of a commercial decision by the institutions concerned.  This interest rate is determined taking into account 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.