Might be too simple a view but they appear to me to be incredibly bad contracts, since there was no interest rate floor put in to minimise the bank's exposure if a "black swan" event like the collapse of interest rates ever occured. A tracker was ment to be a fixed variable hybrid, but compelling banks to follow the base rate rather than a variable, which lets them just ignore the interest rate reality. Similarly, variable and fixed rate holders cannot be discriminated against because they did not avail of (or weren't able to) a tracker when they existed.
"Simplistic demands for banks to slash their rates are just early election stunts"
- Thread starter Brendan Burgess
- Start date
Might be too simple a view but they appear to me to be incredibly bad contracts, since there was no interest rate floor put in to minimise the bank's exposure if a "black swan" event like the collapse of interest rates ever occured. A tracker was ment to be a fixed variable hybrid, but compelling banks to follow the base rate rather than a variable, which lets them just ignore the interest rate reality. Similarly, variable and fixed rate holders cannot be discriminated against because they did not avail of (or weren't able to) a tracker when they existed.
Here is confirmation of the three costs the bank has for mortgages
http://www.independent.ie/business/...-and-will-not-cut-mortgage-rate-31128631.html
cost of funds
cost of risk - disputed by Burgess at the meeting
cost of capital
Domhnall O'Sullivan
Registered User
- Messages
- 20
Hi
Im new to this forum, but unfortunately not at all new to SVRs and their crippling effects !
I have read Ms Devlins comments and have to say I could not dis-agree more!!
If the health of the banks was the single and only performance indicator of a healthy economy then she might have a point,
although even then I think she is being extremely short sighted.
As soon as we decide that the single and only goal of the banks should be to maximise their return to profitability at all costs,
then we return ourselves to the insanity of pre 2008.
Bottom line here : As such the health of economy and health of banks are interlinked in a much more complex way than that.
Banks receive bailouts when they are in trouble. No other "commercial" entity enjoys such a privelege.
When one suffers, both suffer......
The regulators job is to ensure banks are providing services which help support and sustain a healthy economy.
Putting 300,000 plus borrowers at breaking point, with the resulting risk of arrears looming always ahead is not
supportive of a healthy economy..
It is the regulators job to note this unfair discrepancy and to address it ASAP!!
Im new to this forum, but unfortunately not at all new to SVRs and their crippling effects !
I have read Ms Devlins comments and have to say I could not dis-agree more!!
If the health of the banks was the single and only performance indicator of a healthy economy then she might have a point,
although even then I think she is being extremely short sighted.
As soon as we decide that the single and only goal of the banks should be to maximise their return to profitability at all costs,
then we return ourselves to the insanity of pre 2008.
Bottom line here : As such the health of economy and health of banks are interlinked in a much more complex way than that.
Banks receive bailouts when they are in trouble. No other "commercial" entity enjoys such a privelege.
When one suffers, both suffer......
The regulators job is to ensure banks are providing services which help support and sustain a healthy economy.
Putting 300,000 plus borrowers at breaking point, with the resulting risk of arrears looming always ahead is not
supportive of a healthy economy..
It is the regulators job to note this unfair discrepancy and to address it ASAP!!
Perhaps you would be able to attend planned meeting on SVRs ?
Im new to this forum, but unfortunately not at all new to SVRs and their crippling effects !
I have read Ms Devlins comments and have to say I could not dis-agree more!!
If the health of the banks was the single and only performance indicator of a healthy economy then she might have a point,
although even then I think she is being extremely short sighted.
As soon as we decide that the single and only goal of the banks should be to maximise their return to profitability at all costs,
then we return ourselves to the insanity of pre 2008.
Bottom line here : As such the health of economy and health of banks are interlinked in a much more complex way than that.
Banks receive bailouts when they are in trouble. No other "commercial" entity enjoys such a privelege.
When one suffers, both suffer......
The regulators job is to ensure banks are providing services which help support and sustain a healthy economy.
Putting 300,000 plus borrowers at breaking point, with the resulting risk of arrears looming always ahead is not
supportive of a healthy economy..
It is the regulators job to note this unfair discrepancy and to address it ASAP!!