Michael Noonan vows to pressure bank bosses to cut mortgage interest rates again

Michael Noonan says he will call in the heads of all of the main banks to apply pressure to cut mortgage interest rates again, but stood over claims a move to legally force down prices could be unconstitutional.

Speaking ahead of a speech to an international banking conference in Dublin this afternoon, Michael Noonan said he is expecting State owned AIB to cut rates for homeowners further, as the bank’s profitability boosts the lender resilience.

But he said legislation pushed through the Dail this week by Fianna Fáil could be unconstitutional on a number of grounds, including that it interferes with the property rights of bank shareholders; includes no appeal mechanism and would apply retrospectively to mortgages issued in the past.

Competition between banks is now having an effect in driving down prices, he said.

Outlining the Government’s position, Michael Noonan said the policy is to support the banking sector.

“There is nothing In the new programme for government that should worry our local banks,” he told an audience of 1000 global bankers at the event in Dublin.”

The new legislation will also have to be considered by the European Central Bank in Frankfurt, because it applies directly to the work of the Central Bank here, he said.

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