Noonan to meet Central Bank Governor in effort to convince banks to lower mortgage rates

Noonan to meet Central Bank Governor in effort to convince banks to lower mortgage rates

Finance Minister Michael Noonan will meet the Central Bank's Governor today to try to push banks to cut their variable mortgage interest rates.

Minister Noonan's talks with Patrick Honohan come after it was claimed that borrowers were being charged far more than they should.

However, he could face some resistance after a Central Bank official warned it would be "undesirable" for the institution to control rates.

With Ireland's top lenders now returning to profit - and with ECB interest rates at a record low - all sides of the Dáil now believe it is time for the banks to offer some relief to variable rate mortgage borrowers.

Enda Kenny says expects the banks to "do better" to give customers lower interest rates on their mortgages - and his Finance Minister will meet the Central Bank's Governor on the issue.

Michael Noonan says the purpose of the meeting will be to discuss how best to influence the banks to reduce their rates for customers - who are paying up to €3,000 more than the EU average.

However, the Central Bank's Chief Economist Gabriel Fagan has dampened expectations of putting pressure on the banks - warned that it would be "undesirable" for the institution to seek to control rates.

Michael Murray - former banker and columnist with the Sunday Business Post - does not expect much to come of today's meeting.

"I would suspect that Michael Noonan's meeting with Patrick Honohan today is a piece of posturing, to be frank," he said.

"It's a PR exercise - because one of the priorities that the government must have is to get he banks fully back into the private sector.

"And the other priority they must have is to get more competition in the market - you won't get more competition in the market if you start bringing in price controls."

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