http://oireachtasdebates.oireachtas.ie/Debates%20Authoring/DebatesWebPack.nsf/committeetakes/FIJ2015042900002?opendocument#A00400
I am attaching a link to the Finance Committee discussions with Ulster Bank and Bank of Ireland last week. The exchanges are well worth reading in full (IMO) for anybody that is interested in the SVR and/or mortgage arrears resolution debates.
In particular, I thought Ulster Bank's justification of their current SVR was interesting. Per Jim Browne (Ulster Bank CEO):-
"Within the wider RBS, mortgage lending is an important part of our offering in all our main markets, including England, Wales, Scotland, Northern Ireland and Ireland. Broadly speaking the interest margins in all of these markets is similar. However, unlike the other markets, our mortgage book in Ireland has been loss-making. Notwithstanding this fact and reflecting our commitment to the market, we have been progressively reducing our variable interest rates to both our existing and new customers. Separately, the cost of providing mortgage finance reflects the cost of our capital funding, operations, compliance, management of arrears, credit losses and levies. Virtually every one of these inputs in Ireland is substantially higher when compared to other markets in which Ulster Bank and RBS operate. In this context, we do not believe that our SVR is overpriced."
It strikes me that practically all these additional costs are a direct result of policy decisions taken at a government or regulatory level.
I would be interested to hear others views on whether the time has now come to reverse these policies.
I am attaching a link to the Finance Committee discussions with Ulster Bank and Bank of Ireland last week. The exchanges are well worth reading in full (IMO) for anybody that is interested in the SVR and/or mortgage arrears resolution debates.
In particular, I thought Ulster Bank's justification of their current SVR was interesting. Per Jim Browne (Ulster Bank CEO):-
"Within the wider RBS, mortgage lending is an important part of our offering in all our main markets, including England, Wales, Scotland, Northern Ireland and Ireland. Broadly speaking the interest margins in all of these markets is similar. However, unlike the other markets, our mortgage book in Ireland has been loss-making. Notwithstanding this fact and reflecting our commitment to the market, we have been progressively reducing our variable interest rates to both our existing and new customers. Separately, the cost of providing mortgage finance reflects the cost of our capital funding, operations, compliance, management of arrears, credit losses and levies. Virtually every one of these inputs in Ireland is substantially higher when compared to other markets in which Ulster Bank and RBS operate. In this context, we do not believe that our SVR is overpriced."
It strikes me that practically all these additional costs are a direct result of policy decisions taken at a government or regulatory level.
I would be interested to hear others views on whether the time has now come to reverse these policies.