The Governor of the Central Bank has said that standard variable mortgage rates had moved arguably higher than a "fair-minded customer" might have reasonably expected.
But he warned against Government intervention.
Professor Patrick Honohan said while the banks had to achieve a sufficient return on the investment of funds to survive, he would welcome a reduction in the rates as "a benefit to the economy at large".
The Central Bank Governor was appearing before the Oireachtas Finance Committee.
Mr Honohan said that there would be a case for Government intervention, if it was not for the firm conviction that this would have "a stultifying effect on bank efficiency and a chilling effect on the entry of other banks".
He said banks should move to publishing a clear and quantified statement of their standard variable interest rate policy.
Professor Honohan said the Central Bank wrote to each of the banks in February to ask for a clear statement of each bank's pricing behaviour around standard variable rate mortgages (SVRs).
"In their responses, none of the banks have so far provided what I would regard as a clear and quantified statement of their policy with respect to adjustments of the SVR interest rate," he stated.
The Governor also told members that the crisis continues to have serious legacy issues that "cannot be resolved easily or painlessly".
He emphasised that delays and uncertainties surrounding the resolution of non-performing loans remains a much more acute problem. He said progress in this area "remains damagingly slow".
Professor Honohan said he would like to get back to a situation where we have five or six players competing for banking business.
He acknowledged that there was not much competition in the sector at the moment and that the volume of mortgage arrears could be putting foreign players off.
He said Ireland does not spring to mind as a place to open a new branch for most European banks and that one of the reasons for this is the mortgage arrears on non-performing loans.
Professor Honohan also said the inertia banks see on the part of borrowers who could switch acted as a disincentive to drop rates.
In response to a question from Labour's TD Pat Rabbitte, he said research conducted by the Central Bank showed that 15,000 customers could benefit from switching.
He said they could save a four figure sum a year.
Responding to a question from Pat Rabbitte on quantitative easing, Professor Honohan agreed this had had a 'helpful' impact on our borrowings.
On Anglo promissory note deal, he said in their annual report of the Central Bank they showed the value of the unrealised capital gains on the remaining assets of the €9bn portfolio.
He said they had already made a €1bn on the IRBC portfolio.
"The 9 billion isn't in the bag but if interest rates went up again then the gain would be smaller" he said. "Still things are going well on that front" he added.