Banks are charging these rates because they can, or and have been allowed to get away with it. They were the prodigal sons wrapped in cotton wool by the Government and regulator for too long, meanwhile they are bullying customers.
The same money that costs 2.5% in Belgium is 4.5% in Ireland? "That's coz poor Ireland is different and we has problems and we better not go too mad with the rates coz god knows what that will lead to". Nonsense.
There is no argument, whether repossession barriers, tracker subsidisation, "Irish market risk", discouraging of new entrants or market intervention (hilarious to even suggest after years of nationalisation, IBRC, NAMA) that can justify a commercial cartel being allowed to fleece customers in full public view. The market is a basket case with most of the SVR holders unable to switch anyway due to negative equity, and new buyers given little option but to swallow high rates. The banks are sucking money out of the economy that could be a massive boost to disposable income and economic growth.
New entrants are not a panacea either. Shall we ask Ken Bates to return and set up Irish Trust Bank mark II? RBS went into Ireland via UB, got burnt. Halifax came, got burnt. Danske have buggered off. Rabo got burnt with ACC Bank, giving up their license. Barclays has been here since the 1970s, they aren’t interested. A German state went bankrupt because of a German bank's Irish subsidiary, good luck persuading shareholders Ireland is a good idea. There is a mountain of financial regulation in play or on the way, big banks have enough to deal with to be interested in fixing Ireland's problems. Even a major new entrant wouldn’t hold a candle to the three largest state owned banks in terms of impact with their bricks and mortar branch network and they wouldn’t touch negative equity account holders anyway.
It’s nonsense that the CBI can tell banks how to lend and set loan limits, but not even opine on the interest rate. As for the Government, this is commercial activity taking place within the state, hugely impacting the lives of their constituents and it is absolutely their business. It should be a major election issue.
Well done to everyone who has brought attention to this scandal.