Extract of letter dated 25th November 2011 received from the Department of Finance in relation to a letter issued to Minister Noonan enquiring about the variable rate differential of approx 3% between AIB and PTSB which are both state controlled institutions.
“A balance must be maintained by the Government between support provided for individual banks and financial service providers generally through the bank guarantee scheme, other financial support incentives and broader public policy provisions, while at the same time, ensuring that the day-to-day running of these institutions has regard to competition, market conditions and the need to develop stable commercial enterprises to meet the long term credit needs of the households and businesses in the Irish Economy.
In this regard, the Minister has no function in relation to interest rate decisions made by individual lending institutions at any particular time.”
Extract of letter dated 25th November 2011 from Central Bank of Ireland in relation
to the same matter.
“We are involved in a period of intense engagement with lenders on the arrears issues, pressing for progress on a number of fronts such as the unsustainable mortgages question. In particular we are engaging with specific lenders who appear to have Standard Variable Rates set disproportionate to the cost of funds through our existing powers and suasion.”
The letter from the Department of Finance is very disappointing while the letter from the Central Bank of Ireland does hold out some hope that this very unfair situation is being looked at.