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IRISH BANKS ARE required to hold about three times the amount of capital as their European counterparts, according to a new report published today by the Banking and Payments Federation Ireland (BPFI).
The report - commissioned by BPFI and conducted by Martello Strategic Consulting - says that capital requirements introduced after the financial crash have not changed, and this in turn is driving up the cost of lending and mortgages in Ireland.
These requirements brought in after the crisis led to a “vast increase in higher quality loans and a significant reduction in problem loans”, the BPFI said. But the banking system was not seeing the benefit of this reduced risk as the capital requirements have remained static.
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Irish mortgage applicants face some of the highest interest rates in Europe. According to data from the Central Bank last month, Ireland had the joint highest mortgage interest rate in the Eurozone, along with Greece.
The BPFI said the situation regarding capital requirements will mean little changes over the next five years.
Its chief executive Brian Hayes said: “Even when we take mortgages issued in recent years which have significantly better underlying quality, Irish banks are required to hold more than twice the level of average capital of European banks.
“In Austria or Belgium, consumers can borrow up to six times their income level compared to 3.5 times in Ireland, based on a similar Loan-to-Value ratio. However Irish banks who are using stricter mortgage lending rules are required to hold more than twice the level of capital than banks in these two countries.”
The research is based on a study of over 600,000 mortgages valued at €83 million across the five Irish retail banks.
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its a disgrace that u spent thousand on buyin a property yet the law will allow an institution like the esb to come and cut down ur trees and plonk wot ever they want on ur property regardless and then the gov want u to pay property tax on top of the stamp duty that u over paid for the property
I find that one about restaurants losing money fairly bewildering…restaurants didn’t lose anything because they charge for the meal regardless! The only loser is the punter as they pay for food that they don’t eat; that’s their choice though!
It means that the restaurant could have given the customer less food and still charged the same amount. Therefore their margin wasn’t as high as it could have been.
as a former head chef i found when i moved to ireland from the u.k that people here expected a much larger portion of food than i was used to serving… especially vegetables and potato’s, the irish people always seemed to me to have a very good appitite and a healthy balance of meat, fish and veg’s, maybe that was because we were in a rural setting and the majority of our guests were from large families and hardworking backgrounds. i always found that the more ‘upmarket’ the dish was the less it appealed to the palette, yet a nice roast joint of beef or darne of salmon would always be eaten in full,. maybe restaurants are trying to be too posh and forgetting the basics ,thats why people leave most of the food.
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