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Interest Rates

  • 28-09-2010 12:20pm
    #1
    practice
    Registered Users, Registered Users 2 Posts: 304 ✭✭


    Could anybody tell me if it is possible for the Government to introduce legislation that would cap variable interest rate.


    Force the banks to cap all rates at ECB rate plus 1% or 2% and no more


Comments

  • #2
    kippy
    Registered Users, Registered Users 2 Posts: 19,031 ✭✭✭✭kippy


    practice wrote: »
    Could anybody tell me if it is possible for the Government to introduce legislation that would cap variable interest rate.


    Force the banks to cap all rates at ECB rate plus 1% or 2% and no more
    I am sure they could, but we are all so tied up in the banks (as taxpayers) that this would seriously hamper the banks in increasing their revenue stream. We might save a few euro paying less interest on our mortgages but we'd end up supporting the shortfall in revenue via other means, such as higher taxation.

    Its crazy when you think how completely tied up the state is in Banks and Property now.


  • #3
    Sarn
    Registered Users, Registered Users 2 Posts: 3,123 ✭✭✭Sarn


    practice wrote: »
    Could anybody tell me if it is possible for the Government to introduce legislation that would cap variable interest rate.

    Force the banks to cap all rates at ECB rate plus 1% or 2% and no more

    A move like that would result in the banks halting all lending. As it is the banks are losing a fortune on trackers which is what that legislation would effectively result in. It costs the banks a lot more than the ECB rate to borrow money so they couldn't lend below the cost of borrowing for long (which is what they're currently doing).


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