Political ‘interference’ causes investor concern

International investors are looking on with concern at the pressure the Government has placed on the banks to lower home loan rates — and the return taxpayers will get from future sales of AIB, Permanent TSB and Bank of Ireland could be hit, experts have warned.

Finance Minister Michael Noonan said yesterday that following a round of meetings this week with bank chiefs, he has secured their agreement to lower their standard variable mortgage rates.

The Government would consider “a penal banking levy” or provide new powers to the Central Bank if the Department of Finance was not happy with the lenders’ actions in the coming months, the minister said.