Michael McGrath (Cork South Central, Fianna Fail)
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162. To ask the Minister for Finance if other than his meeting in November 2011 he has held discussions with the banks on the subject of passing on European Central Bank rate reductions; the number of ECB rate reductions since that date; and if he will make a statement on the matter. [32667/14]

Michael Noonan (Limerick City, Fine Gael)
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Firstly, I must confirm to the Deputy that neither the Central Bank nor I have any responsibility for the variable mortgage interest rate charged by regulated financial instutions.  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 change or to the mortgage interest rates charged.  It is a commercial matter for each institution concerned. The ECB marginal lending facility rates from November 2011 are as follows:

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 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.  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.

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. However, as part of the Central Bank s work on mortgage arrears, lenders were asked to consider all avenues to help customers in arrears, including interest rate reductions.

Since the meeting in November 2011, I have had further meetings with the various banks at senior level at which this issue would have been one of many issues discussed. It would also be discussed at regular meetings between my officials and the banks. However, it should be noted that the Relationship Frameworks specifically reference decisions regarding pricing as being commercial decisions for the banks.