Ireland called on the European Central Bank on Saturday to temper interest rate rises ahead of a decision next week, citing their “real-life” impact on ordinary people.

The ECB has raised rates by 3.5 percentage points since July in an unprecedented campaign of monetary tightening to rein in inflation.

Irish Finance Minister Michael McGrath urged the ECB “to take account of the real-life impact on people of the decisions that are made”.

He noted growing pressure on homeowners whose interest rates have exploded during an informal lunch in Stockholm with his EU counterparts and the ECB chief Christine Lagarde, which he described as “particularly open and frank” Friday.

“In particular we’ve seen in the non-bank sector in Ireland very high interest rates being charged by some lenders and that does place pressure on ordinary households,” he told journalists.

Despite inflation in the euro area falling after it hit a peak of 10.6 per cent in October, the Frankfurt-based ECB is expected to raise rates Thursday.

In March, consumer prices in the eurozone rose by 6.9 per cent on an annual basis -- far from the ECB’s two-per cent target.

McGrath said business also had a role to play, adding “that where prices are falling, we need to see the benefit of those reductions being passed on to consumers by way of price reductions”.

Separately, in the first quarter of 2023, seasonally adjusted GDP increased by 0.1% in the euro area and by 0.3% in the EU, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union. In the fourth quarter of 2022, GDP had remained stable in the euro area and had decreased by 0.1% in the EU.

Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 1.3% in both the euro area and the EU in the first quarter of 2023, after +1.8% in the euro area and +1.7% in the EU in the previous quarter.

Among the Member States for which data are available for the first quarter of 2023, Portugal (+1.6%) recorded the highest increase compared to the previous quarter, followed by Spain, Italy and Latvia (all +0.5%). Declines were recorded in Ireland (-2.7%) as well as in Austria (-0.3%). The year-on-year growth rates were positive for all countries except for Germany (-0.1%).

Review failure: The US federal Reserve Board on Friday announced the results from the review of the supervision and regulation of Silicon Valley Bank, led by Vice Chair for Supervision Michael S. Barr. The review finds four key takeaways on the causes of the bank’s failure:

Silicon Valley Bank’s board of directors and management failed to manage their risks; federal Reserve supervisors did not fully appreciate the extent of the vulnerabilities as Silicon Valley Bank grew in size and complexity; When supervisors did identify vulnerabilities, they did not take sufficient steps to ensure that Silicon Valley Bank fixed those problems quickly enough; and the Board’s tailoring approach in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act and a shift in the stance of supervisory policy impeded effective supervision by reducing standards, increasing complexity, and promoting a less assertive supervisory approach.”Following Silicon Valley Bank’s failure, we must strengthen the federal Reserve’s supervision and regulation based on what we have learned,” said Vice Chair for Supervision Barr. “This review represents a first step in that process-a self-assessment that takes an unflinching look at the conditions that led to the bank’s failure, including the role of federal Reserve supervision and regulation.”

The report discusses in detail the management of the bank and the supervisory and regulatory issues surrounding the failure of the bank. It goes through the recent supervisory history of Silicon Valley Bank and includes more than two dozen documents containing the bank’s confidential supervisory information such as supervisory letters, examination results, and supervisory warnings.

“I welcome this thorough and self-critical report on federal Reserve supervision from Vice Chair Barr,” federal Reserve Chair Jerome H. Powell said. “I agree with and support his recommendations to address our rules and supervisory practices, and I am confident they will lead to a stronger and more resilient banking system.”

The report and documents detail the bank’s rapid growth, as well as the challenges federal Reserve supervisors faced in identifying the bank’s vulnerabilities and forcing the bank to fix them. At the time of its failure, the bank had 31 unaddressed safe and soundness supervisory warnings-triple the average number of peer banks.