So i read in another thread on here that in France for example the consumer protection agency monitors variable rates and no bank/lending institute can charge a customer more than e.g 2.4%
Compare that to here where the variable rates went through the roof after the recession - it took a lot to get them to pull them back - and when they did no one saw a problem - no one got refunds ? I think PTSB went up to 7% at that time ??
Then low and behold the banks start doing well and offered new customers cashback and lower interest rates - i mean wow how sickened I was by that.
But look at France. It did not have a financial crisis like we did and banks there could borrow at ECB rates and raise bonds close to ECB rates, so because their cost of funds were nowhere near what Irish banks had to pay for a couple of year they were well able to keep rates down.
Then look at how non payers are treated in France. You'd be VERY lucky to be still in your house 6 months after non payment and it would cost the bank very little to repossess.
Then you look at the deposit needed in France 20% minimum and more often than not 25%. The legal costs of property purchase in France are enormous. You would not see change from €10k. Then you have the mortgage term. 20 years max except in exceptional circumstances. And then the lending cap - if you think CBI rules are strict, in France ALL your lending repayments cannot exceed 30% of your net income. So a homeowner buying a property worth 250,000 in France in reality has to have at least 60k and virtually no other borrowings, and if you've that much invested in a property, you will not take a risk in losing it
So a French bank has virtually zero risk yet are still charging 1.6%. That's a very healthy profit margin considering they can borrow at 0% and probably higher than the net margin Irish banks have.
As for the CBI. Like any institution or company, the head person dictates the style of "trading". Up until Phillip Lane came in, it was always banking people running the central bank and they were very indoctrinated into the "system" they worked in. Suddenly an unknown comes in that does not come from within the inner circle and all hell breaks loose - if you are a bank.
For the consumer, finally the hold the inner circle had on the institution that is the CB was broken and the results are now there for all to see.
the CBI can't be just a consumer champion - it has to straddle both sides. You won't be happy with every decision made or every policy implemented, but its the same for the banks - they have finally had to up their game.