Irish banks blame capital requirements for driving up cost of lending

Major lenders say they must hold three times the capital of European banks

Banking Payments Federation of Ireland say current capital requirements are effectively trapped at financial crisis levels. Picture: iStock

Banks in Ireland say they are required to hold three times the capital for mortgages compared to average requirements across the EU which they claim is impacting the cost of lending here.

Banking Payments Federation of Ireland (BPFI) say stricter lending rules have led to an increase in higher quality loans and a reduction in problem loans in Ireland but that current capital requirements are effectively trapped at financial crisis levels.