I wish to raise a bread and butter issue with the Tánaiste which has a real impact on the level of disposable income of many people, the 300,000 or so mortgage holders who are paying a variable rate of interest which is way over the odds. The interest rates on variable rate mortgages being charged by banks in Ireland are completely unjustifiable. A person taking out a new mortgage on a variable rate can be paying anything up to 4.5% compared to a euro area average of 2.5%. For example, a person with a mortgage of €200,000, the difference in interest every year is about €4,000, that is over €300 extra per month being paid by an Irish mortgage holder compared to a counterpart in another eurozone country. This is completely unacceptable at a time when the cost of funds for the banks is decreasing, the net interest margin is increasing very significantly and yet the cost of variable rate mortgages is not coming down, with the exception of the very welcome move announced recently by AIB.

The ECB rate reductions have not been passed on to variable rate customers and yet the Government appears to be completely uninterested in this issue. Is the Government merely a neutral bystander on this issue? Has the Government a view on the interest rates being charged by banks in respect of variable rate mortgages? Has the Government specifically discussed this issue with the banks and with the Central Bank?

I will place this issue in context. Everyone who has a mortgage, in particular younger people in the age group of 35 to 50 years, may have taken out a mortgage in good faith when Fianna Fáil was in government at the height of the boom-----

The Tánaiste should get over it.

-----and house prices were in a bubble. Of course we know that at a certain stage the banks stopped offering tracker deals. I am sure Deputy McGrath will be happy to acknowledge that it was very much on his party's watch that when the tracker deals ended the people who came after that period faced variable rates.

There are times in financial structures when a fixed rate can militate against borrowers and this has been proved in Irish financial history. There are times when variable rates can offer advantages and disadvantages. The critical point is that the banks should return to normal operational capacities and do what banks should do which is to offer funding and reliable sources of funding to people who have the financial resources and the employment and income structures which will allow them to borrow and to borrow at a reasonable cost rate.

As the Deputy said, the recent move by AIB to bring back competition to the variable rate market is extremely welcome. I hope it is a move by the banks towards a more competitive offering on mortgage costs because this is critical for people.

The banks are working their way through their collapse. The new managing director of PIMCO said at a recent conference in Kilkenny how foolish and misguided was Fianna Fáil's fatally flawed bank guarantee, which he maintains, destroyed the economic capacity of the country. Unfortunately, the banks are still in a recovery situation but I hope that they will now move to more competitive offerings on mortgage charges of all kinds but in particular on interest charges for current borrowers and for those anxious to purchase a family home, of which there are many, thankfully.

The Tánaiste has taken us on an interesting historical tour as she sees it but she avoided the key issue and she avoided answering my direct questions. The cost of funds for the banks today is in the region of 1%. Bank of Ireland has put it on the record that its cost of funds is 1.15% and yet variable rate customers are being charged up to 4.5%. It is exploitative and exorbitant and there is no justification whatsoever for it and it is being presided over by the Tánaiste's Government. Up until recently, Brian Hayes, MEP, was the Minister of State in the Department of Finance but he is now safely ensconced in the European Parliament. He has stated that variable rate customers are being fleeced and yet the Government does not seem to have a view on this issue.

The ECB rate is virtually zero. Anyone with savings will know that the banks are paying little or nothing on deposits. The cost of funds has never been lower and yet the banks are milking it in respect of the profits they are earning on variable rate customers. Both AIB and Bank of Ireland are profitable again so there is no point in the Tánaiste trying to spin that it is all Fianna Fáil's fault; that is nonsense. The banks are profitable, they are accessing money at 1% and they are charging 4.5% and the Tánaiste is standing over this. I asked her direct questions: Does the Government have a view on this? Has the Government discussed this issue directly with the banks? Has the Government discussed this issue with the Central Bank? It would be very helpful if we could have some straight answers.

I am glad the Deputy mentioned the Central Bank. Banks in Ireland are regulated and supervised by the Central Bank-----

With its eyes closed.

I put it to Deputy McGrath, as have many commentators remarked on the actions of his Government in respect of banking, that there was a grossly inadequate supervisory model in place during Fianna Fáil's time-----

This is diversionary. Is this allowed?

Please, there is only one minute to answer.

Does Deputy McGrath recognise that the Central Bank is the supervisory authority for Irish banks?

It is the Government's view.

Let us be clear as to what we want for Ireland. We want functioning credit institutions which, unfortunately, the Deputy's Government destroyed. That is history.

Their boards destroyed them.

They were destroyed as a result of the guarantee. We set up a series of regulatory structures to ensure that the supervisory authority for banking in Ireland is the Central Bank. Deputy McGrath is a member of the finance committee. He has the power to call in the Governor of the Central Bank and to talk to him about the bank's supervision-----

He is coming to the committee. The Government is allowed to have an opinion.

-----of the rates for the kind of mortgages we have been discussing. The Deputy is ignoring-----

Thank you, Tánaiste. We are over time.

A total of 300,000 people have been affected on the Tánaiste's watch and she has no opinion.

You are ignoring----

I am sorry-----

On the financial crash, what you are now suggesting-----

I asked for your opinion.

-----is that we ignore the Central Bank and go back to what Fianna Fáil used to do, which is to call in the bankers and order them directly. This is the road-----

This is a cop-out.

Burn the bondholders.

If this is your policy suggestion, it is the way to return the country, should you get the chance, to another bank crash. That is what you are suggesting.

The Tánaiste has no opinion.

The Government is washing its hands of 300,000 people.