Bank probe call

Irish Examiner - - Front Page - Ea­mon Quinn

Reg­u­la­tors should probe the grip held by AIB and Bank of Ire­land over Ir­ish bank­ing, con­sumer and fi­nan­cial ex­perts have said.

Their calls come af­ter ECB head Mario Draghi told the Oireach­tas fi­nance com­mit­tee that a “quasi-monopoly” was driv­ing up the costs of credit for Ir­ish homes and busi­ness bor­row­ers alike.

Pol­icy and coun­cil ad­vi­sor with the Con­sumers’ As­so­ci­a­tion of Ire­land, Der­mott Jewell, said there has been no real com­pe­ti­tion since the end of the cri­sis.

Con­sumer and fi­nan­cial ex­perts have called on reg­u­la­tors to probe the grip held by AIB and Bank of Ire­land on the bank­ing mar­ket. The calls come af­ter ECB head Mario Draghi told the Oireach­tas Fi­nance Com­mit­tee on Thurs­day that a “quasi-monopoly” was driv­ing up the costs of credit for homes and busi­ness bor­row­ers.

Pol­icy and coun­cil ad­viser with the Con­sumers’ As­so­ci­a­tion of Ire­land, Der­mott Jewell said there has been no real com­pe­ti­tion since the end of the cri­sis and that the Com­pe­ti­tion and Con­sumer Pro­tec­tion Com­mis­sion should in­ves­ti­gate. Fi­nan­cial ex­pert Bren­dan Burgess called for the Cen­tral Bank to ban lenders from of­fer­ing cash-back mort­gages, say­ing the prod­ucts al­lowed banks to charge more. He wants a re­view of the home re­pos­ses­sion laws be­cause lenders have long ar­gued that the regime drives up their lend­ing costs. How­ever, Mr Burgess said any com­pe­ti­tion probe would achieve lit­tle.

New Cen­tral Bank fig­ures showed Ir­ish banks charge 3.08% on new mort­gage loans, much higher than the av­er­age eu­ro­zone rate of 1.76%. Cen­tral Bank gover­nor Philip Lane said yes­ter­day lenders had left the mar­ket dur­ing the crash and clean­ing up bad loans and eco­nomic re­cov­ery would help im­prove con­di­tions for new en­trants. He echoed Mr Draghi’s com­ments for the need to drive on with Eu­ro­pean bank­ing union and cap­i­tal mar­kets union.

The com­mis­sion sig­nalled that af­ter its 2017 re­port that a new probe was un­likely. “The is­sues high­lighted at Thurs­day’s Oireach­tas Fi­nance Com­mit­tee are not new, as the lack of com­pe­ti­tion has been a fea­ture of the Ir­ish mort­gage mar­ket for many years,” it told the Ir­ish Ex­am­iner.

“The Com­pe­ti­tion and Con­sumer Pro­tec­tion Com­mis­sion shares the view that there is not enough com­pe­ti­tion in the mort­gage mar­ket. To ad­dress this and to en­cour­age new mort­gage lend­ing ini­tia­tives, we sug­gested ac­tions which could be taken by the Cen­tral Bank of Ire­land and the De­part­ment of Fi­nance. Ac­tions were also taken by the com­mis­sion in terms of pro­vid­ing as­sis­tance to con­sumers to switch their mort­gage provider, where pos­si­ble, which fur­ther stim­u­lates com­pe­ti­tion,” it said.

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