Fianna Fáil 'Dismayed' At Central Bank Position

Fianna Fáil has said that it is "dismayed" at reports that the Central Bank is "siding with the banks and not 300,000 mortgage holders paying variable mortgage rates which are double the euro zone average".

The party's finance spokesperson, Michael McGrath, made the comments following reports that the Central Bank's analysis of variable mortgage rates concluded that variable rate mortgage holders are not being treated unfairly and has recommended that no action be taken on the issue.

Deputy McGrath said: "Reports that the Central Bank is recommending that no action should be taken to force the banks to reduce variable rates will come as a bitter blow for families throughout the country.

"It is extremely difficult to understand how the Central Bank could arrive at that conclusion based on the evidence which is before us. The margin earned by banks on variable rate loans has grown dramatically as their cost of funds has fallen. Variable rates in Ireland are now so high that a customer with a €200,000 mortgage and 20 years left to run is paying €4,000 a year in additional interest when compared to a similar customer in other European countries. That the Central Bank does not see a problem with this simply beggars belief.

Deputy McGrath said that the Central Bank could not "operate in a bubble" and focus solely on the profitability of the banking sector.

"The Central Bank must recognise its pivotal role in dealing with these issues. While we await the formal publication of the Central Bank report on the issue of variable rates, it is important to emphasise that the time has long since passed when a hands off approach can be accepted. Mortgage customers have a right to expect that action will be taken without further delay. I am calling for the publication of the Central Bank report as soon as possible. Fianna Fáil will study its findings and bring forward legislative proposals in response."

(MH/CD)