Bernard Durkan (Kildare North, Fine Gael)
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45. To ask the Minister for Finance the degree to which his Department monitors activities in the banking and financial services sectors with particular reference to the need to ensure that inflation is not generated from that area given the extent to which monies are made available throughout Europe at a low interest rate; and if he will make a statement on the matter. [21410/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Monetary policy for the euro area is formulated by the Governing Council of the European Central Bank (ECB) and implemented by the Eurosystem. The Governing Council sets its key lending and deposit rates with regard to its monetary policy objective of price stability.

Any change in monetary policy will depend on how the economy evolves and how the Governing Council assess the outlook. While inflation has increased significantly this year, and is projected to remain high over the coming months, I can inform the Deputy that the ECB has committed to a gradual, flexible and data dependent approach to the calibration of monetary policy in order to deliver on its mandate. Financing conditions will be monitored closely as they are an important part of the transmission mechanism that links the monetary policy instruments controlled by Central Banks to the ultimate objective of achieving medium-term inflation goals.

It is a commercial matter for individual banks and other lenders to set their own lending and deposit rates, having regard to commercial considerations when operating in the market. As Minister for Finance, I have no role in prescribing or setting these interest rates.