Bank remuneration and mortgage rates
Senator Coghlan defends the Government’s position on bank pay and says remuneration and interest rates are commercial matters, while acknowledging the hardship caused by mortgage increases. He supports stronger regulation but rejects further taxpayer bail-outs and blames the previous Government for inadequate banking supervision.
Senator Darragh O'Brien is always interesting to listen to on the Order of Business and, indeed, otherwise. However, he knows full well that it was a previous Administration which signed off on the remuneration package of the man in Bank of Ireland to whom he referred.
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The current Minister for Finance, Deputy Noonan, engaged independent consultants to analyse the banking sector, which resulted in the Mercer report. He expects the banks to produce savings of between 6% and 10%.
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Those savings will come from ordinary bank workers.
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The Minister is awaiting a response from the banks. Regarding events yesterday, Senator Darragh O'Brien again knows full well that the State equity in Bank of Ireland is 15% and reducing. The institutional investors and their proxies own approximately 75% or 80% of the shares in the bank. That fact was well known. This is a commercial operation-----
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Does the Government not have a view on the remuneration package for the chief executive?
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Of course we have a view. The Minister has made his views quite clear. We support what Senator Barrett has proposed and that is the direction in which we are going. This has to be done in an orderly fashion.
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What will be done about the rate increase?
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I am just coming to that. That is a commercial decision.
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We cannot have a situation in which the taxpayer has to ride to the rescue again to bail the bank out. We certainly do not want that to happen. That is a commercial decision that no Government, past or present, should interfere with.
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That is Government policy - we are not going to interfere. We must have commercially viable, profitable banks. I am not standing over the decision, which will be very tough for mortgage holders.
We must go down the route proposed by Senator Barrett, which is supported by the Minister of State, Deputy Hayes. I am delighted there has been a meeting of minds on that because there must be proper regulation and supervision of the banking system, which was certainly lacking during Fianna Fáil's time in office.