EU competition chief fails to rule out probe into Irish tracker scandal

Margrethe Vestager, however, says more hard evidence of cartel behaviour is needed

Margrethe Vestager, competition commissioner of the European Commission, is before the European Parliament committee on economic and monetary affairs on Tuesday.

Margrethe Vestager, competition commissioner of the European Commission, is before the European Parliament committee on economic and monetary affairs on Tuesday.

 

EU competition commissioner Margrethe Vestager has declined to rule out the possibility of an EU investigation into Ireland’s tracker mortgage scandal.

At a meeting of European Parliament committee on economic and monetary affairs (Econ) on Tuesday, Ms Vestager said the Commission was monitoring developments relating to the overcharging controversy.

In response to questions from Irish MEPs, including Fine Gael’s Brian Hayes, she said she needed more “hard evidence” of cartel activity, however, to launch an EU competition investigation and that, in any case, the “first response” should probably come from the Irish competition authority.

Nonetheless she encouraged people or entities with information on possible collusive behaviour between the banks to come forward, noting there were specific whistle-blowing channels within the Commission’s competition arm.

Mr Hayes had earlier informed her of the extent of the controversy and the fact that the regulator’s trawl had uncovered more than 27,500 cases where the banks either denied customers their right to a low-cost mortgage linked to the ECB’s main lending rate or applied the incorrect rate.

Mr Hayes said while the Central Bank was seeking redress for affected customers the competition or anti-trust side of the issue had, so far, not been examined in great detail.

“If the banks colluded, they may have prevented or limited the number of new entrants to the Irish mortgage market, which makes it a competition issue,” he said.

He also noted that the EU commission’s Directorate General for Competition had directly overseen the recapitalisation of the Irish banks, and therefore had a responsibility for the behaviour of the banks.

In response to a letter, Maria Velentza, director of the competition directorate-general of the commisison, also recently informed Mr Hayes that Brussels was following the Central Bank’s examination of the tracker issue, while noting that a significant portion of the “identified harm” was being addressed outside the remit of competition law.

Mr Hayes had written to the commission, claiming Irish banks were acting “as a cartel to restrict competition by controlling mortgage rates and sharing the Irish mortgage market”.

While Ms Velentza said the commmision took these views “very seriously”, it was not in receipt of information that the banks here actively colluded.

“We do not currently have any information, neither from the Central Bank’s investigation nor from other sources, which would indicate that Irish banks actively colluded in this matter,” she said.

Overcharging

Ms Velentza also said that, if suspected anti-competitive behaviour was predominantly limited to one country, the relevant competition authority would be well-placed to investigated.