merrion street

This Bill has been tabled by Fianna Fáil and proposes to give power to the Central Bank of Ireland to regulate interest rates. This Bill will be discussed in the Dáil tonight (Tuesday) with wrap up tomorrow (Wednesday).
I feel there are three major flaws in the Bill as presented.

1. Some of the provisions appear unconstitutional
2. With provisions like these the European Central Bank will need to be consulted before legislation could be enacted.
3. The Central Bank Governor (and his predecessor) has stated that they do not wish to regulate interest rates. As an independent body even if the Central Bank were given the power to regulate interest rates they could not be required to exercise this power. In addition competition is not a function of the Central Bank, it falls within the remit of the Competition and Consumer Protection Commission (CCPC).
For these reasons, and to assess other unintended consequences, I consider it essential that this Bill goes through pre-legislative scrutiny. After all, it was for such reason that the Programme for Government provides that this would be mandatory for new Bills.
I have received Government approval to propose to the Dáil that the Bill be sent for pre-legislative scrutiny rather than pass second stage. In the event that our reasoned amendment is not accepted by the Dáil, I proposed and it has been agreed that we should not oppose the passage of the Bill at Second Stage and let it go forward to Committee Stage. This approach is currently being examined with the Oireachtas Bills office.

The Government does of course share the principle of reducing standard variable rates.
Now that the banks are almost fully recovered they will be in a position to do more to help their customers.
It is widely agreed that competition is the best way to reduce rates and ensure that we have a sustainable and viable mortgage market and that the heavy hand of regulation may not be the best way to engender competition.
There are also some signals that new entrants are looking to enter the Irish market. This level of competition will put further downward pressure on interest rates.

The steps I have taken thus far have been very effective. Banks have reduced their variable and fixed rates. I would like to see the banks aiming to suit the different needs of different people.
The Government also encourages switching options between various institutions made easier for customers. In addition, the Central Bank supports the Department of Finance engaging with banks on their procedures to make it easier for customers to switch.