ECB worried about political pressure on banks re SVRs

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Sarenco

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According to Cyril Roux, the Head of Financial Regulation at the Central Bank, the ECB are concerned at the political pressure being exerted on Irish banks to reduce mortgage rates.

Mr Roux described the Irish banking system as "quite fragile" with "weak profitability".

Given the chorus of regulators, central bankers and economic academics that have argued against any political intervention on variable rates, I would suggest that it looks increasingly unlikely that Minister Noonan's recent announcement will have any appreciable effect on the SVRs charged by Irish lenders.
 
Very easy for Cyril Roux or the ECB to express concern about this. He isn't being asked to bail out his countries banks twice like we have been and continue to be.
 
Well, the ECB was part of the troika that bailed out the State having guaranteed our banks' liabilities and I'm pretty sure Monsieur Roux pays tax to the Irish revenue like the rest of us...
 
Correct re the ECB being part of the troika and monsieur Roux paying his taxes. If it could be established that mr Roux is 1 of the 300K people paying an svr mortgage and bailing out the banks for a 2nd time then I would respect his argument a lot more as he would appreciate the high level of unfairness going on here and his statements might just reflect our situation. To me he's reflecting a business position which is fair enough but all the while we're doing the heavy lifting 4 a 2nd time and an awful lot more than our fair share of the lifting.
 
It's not really an argument - Mr Roux was simply relaying the fact that the senior regulator of our banks (ECB) are concerned at the political pressure being applied on our banks re variable rates given their fragile financial position. Ultimately the ECB can revoke a bank's licence, in which case we (the taxpayer) lose our investment forever.

You are of course right that you are paying "on the double" for the defaulting loans within our banking system - higher taxes and higher mortgage rates.

By way of possible solutions, I have suggested expediting (not further delaying) the resolution of non-performing loans and capping the maximum mortgage rate that can be charged to existing borrowers by reference to average new lending rates.
 
Very good analysis, not the 1st ive seen it from u2b fair. I saw figures from the banks that show how fragile their finances still are, seems their profits are more or less the sum total of the excess interest svr holders are paying them. Capping the max mortgage rate like in France is a solution on top of dealing with non-performing loans. Arrears is a massive issue in this country that isn't being addressed at all right and all the while we the good mortgage payers seem to be carrying the can for their losses on those too, something I certainly don't recall seeing in my contract when I checked it recently.
 
Thanks Tony.

I do think it's a pity (but perhaps unsurprising) that our politicians simply want to offer everybody a free lunch to be paid for by somebody else (who is never specified) rather than actually tackling the real causes of the problem in a measued fashion. I'm pretty sure most of our politicians are smart enough to understand this but I suppose it's more productive from their perspective to simply play to the gallery.
 
Sarenco said:
Thanks Tony.

I do think it's a pity (but perhaps unsurprising) that our politicians simply want to offer everybody a free lunch to be paid for by somebody else (who is never specified) rather than actually tackling the real causes of the problem in a measued fashion. I'm pretty sure most of our politicians are smart enough to understand this but I suppose it's more productive from their perspective to simply play to the gallery.
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Sarenco .
(measured fashion) you are correct but we need leadership.

I wish tackling the (free lunch brigade) would sort this ,and I have no doubt there are (free launch merchants) but the arrears/repo issue is such a large issue with strong views on Moral Hazard etc V keeping society together , that our jellyfish politicians will not make planned decisions because they Politicians do anything to avoid losing a % of their votes.
 
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