Varadkar: Government 'not ruling out' extra taxes on banks over tracker mortgage scandal

Paschal Donohoe is due to meet with top bankers over the next week

Varadkar: Government 'not ruling out' extra taxes on banks over tracker mortgage scandal

Leo Varadkar. Photograph: Leah Farrell / RollingNews.ie

Updated 14.45

The Taoiseach says how the banks act in the next week will decide whether or not the Government will need to place extra taxes on them over the tracker mortgage scandal.

Leo Varadkar was speaking ahead of Finance Minister Paschal Donohoe meeting with the heads of the banks on Monday and Wednesday.

It comes after a probe revealed that thousands of customers of several Irish lenders were overcharged or wrongly denied a tracker rate.

An ongoing Central Bank review has found that at least 13,000 accounts were impacted, while €120 million in compensation has been provided to around 3,300 affected customers.

It has been suggested that up to 30,000 people may have been affected in total - and the Taoiseach says new taxes could be put on the banks if they don't make things right.

He said: "The Government is taking this issue very seriously. We're very frustrated at the lack of progress to date - and we're certainly not ruling out further regulations, further sanctions or additional taxation on the banks as the case may be.

"We need to say what happens next week. As you know, Minister Donohoe is going to meet with the heads of the banks during the week. He's going to speak to them and demand further action."

He added that less than half of people affected have been compensated, noting that "that's not good enough".

Karl Deeter, financial adviser with Irish Mortgage Brokers and Advisors, says offering compensation & restitution is not straightforward in many cases - particularly when the scandal has had a major impact on a person's life.

Speaking to On the Record with Chris Donoghue, he explained: "They would have lost homes, they would have mental health issues... they completely went downwards due to this occurring.

"How you even come up with a figure for how to give them restitution is actually quite tricky. Not only that... the Central Bank aren't the ones who do that."