A Fianna Fáil Bill on mortgage interest rates has caused a reduction in bank share prices, Minister for Finance Michael Noonan has alleged.

During heated Dáil exchanges, the Minister told Fianna Fáil's finance spokesman Michael McGrath that on the day he republished his Central Bank (Variable Rate Mortgages) Bill 2016, bank shares fell by 10 per cent.

“You know well they are not related….you are scaremongering,” Mr McGrath said.

Mr Noonan said Mr McGrath did not like what he had to say.

“Go back and check the date,” he added.

Mr McGrath’s Bill would give new powers to the Central Bank to reduce monthly payments for many of the 300,000 households paying variable interest on their loans.

Mr Noonan said the Bill was flawed, and Fianna Fáil had rushed it before the setting up of a Dáil committee to provide for pre-legislative scrutiny.

Difficulties

He said a minority Government was in power. “That makes difficulties for the Government, but it puts an onus on the Opposition as well.’’

Previously the government of the day was protected by the whipping system and the opposition could have a go. “If you have a go now there is a risk.”

Mr Noonan said the Government was very conscious of the difficulties faced by borrowers and supported the principle of reducing interest rates.

“However it does not consider regulating interest rates is in the long-term interests of the Irish economy.’’

Earlier, Mr McGrath said the standard variable mortgage interest rate was vital for family finances.There was a strong degree of consensus that the current situation was far from satisfactory. A 1 per cent reduction would help customers to the tune of €1,300 annually.

“Tonight’s debate is a significant chance for the Dáil to assert its greater freedom to act collectively, and in a spirit of co-operation and in the interests of the general public.’’

He said it was in line with what Fianna Fáil had agreed with the Government.

The House will vote on the Bill on Wednesday night.