Howlin: Govt cannot force NIB to drop rates

A senior Minister has said National Irish Bank's decision to hike variable mortgage interest rates by almost 1% is "disappointing".

NIB has said it has not increased the charges since 2008 and, since it does not rely on European Central Bank funding, it is not obliged to pass on ECB rate cuts.

Opposition parties are calling on the Government to give the Financial Regulator Matthew Elderfield powers to prevent banks raising interest rates, along with ensuring reductions are passed on.

However, the Public Expenditure and Reform Minister Brendan Howlin has said it would not be possible to force all institutions to participate.

Mr Howlin said: "It is disappointing that there is any increase, but it is my understanding that it would be a minority that would be affected, but even that minority should not be affected.

"Our leverage is minimum in relation to banks outside both the Government guarantee and the funding envelope of the ECB."