Well, it's not rocket science. But still refreshing to see something so basic laid out in the Irish media
And a little dig or 2 at the populist interference by political parties in the Banking sector
http://www.irishtimes.com/business/...sessions-linked-to-higher-mortgages-1.2692506
And a little dig or 2 at the populist interference by political parties in the Banking sector
http://www.irishtimes.com/business/...sessions-linked-to-higher-mortgages-1.2692506
Low rate of repossessions linked to higher mortgages
Borrowers pay price for low repossessions and State control of banks, ESRI says...
...However, Spain, which experienced a similar boom and bust to Ireland in recent times, has one of the lowest average rates in Europe, at 1.7 per cent. One of the reasons was that it was comparatively easier to repossess properties when loans were in default in Spain than elsewhere, said Kieran McQuinn, associate research professor at the ESRI.
“If it’s more difficult for banks to repossess properties and repossess distressed loans, on average, [banks] tend to price this into their credit risk and that overall leads to higher interest rates on average,” said Mr McQuinn....
....The Government’s continued involvement in the banking sector following the financial crisis, and Fianna Fáil’s successful initiation last month of a Bill to give the Central Bank powers to cap variable home loan rates, were damaging competition and contributing to higher mortgage costs, Mr McQuinn said....
...“But the point we’re making is that because Irish firms and Irish households are facing higher interest rates in the market, there’s also potentially a cost associated with that State involvement which maybe people aren’t focusing on.”