Labour Presses Banks To Pass On Interest Rate

Business & Finance - Construction & Property

Friday, 18 November 2011 11:23

Written by Pat Flynn

Clare Labour TD Michael McNamara has described as 'perverse' the refusal by Bank of Ireland and Ulster Bank to pass on lower European Central Bank (ECB) interest rates to hard pressed mortgage holders.

The two banks, along with AIB, had ignored Government pressure to pass on the 0.25 per cent rate cute announced by the ECB earlier this month.

Last week however, AIB, which is 99 per cent owned by the State, made a dramatic U-turn and confirmed that it had decided to pass on an interest rate cut to standard variable customers.

Clare Labour TD Michael McNamara said last night: “AIB has been dragged kicking and screaming by the government and at last agreed to do the right thing. So far, the other main players have refused to pass on the lower rate which the European Central Bank has decided on. This reduction is designed to assist mortgage holders and not to line the pockets of the banks.”

Deputy McNamara said that the banks have failed to recognise the times in which we live and described the failure of Bank of Ireland an Ulster Bank to follow AIB's lead, as perverse.

“So far as the banks are concerned, ethical behaviour is a foreign country. Rather, they behave like Shylocks oblivious to the pain in society around them; pain that their reckless lending for financial gain created. They still live in a land of stratospheric salaries, bonuses and self-importance while continuing to screw the family in the three bedroomed semi-detached, as well as our State,” Mr McNamara said.

The Clare Labour TD also noted the Governor of the Central Bank’s intervention on the side of the banks against the interests of this State, its government and its people.

“I am reminded of his decision this time last year to go on radio and confirm that the EU and the IMF were preparing a bailout package for Ireland. This intervention, while the government was still negotiating, was against the interests of this State and ordinary citizens. While Mr Honahan may see these acts as a fair price to pay for his seat on the Governing council of the ECB, they call into question whether he and the Irish Central Bank exist to serve the Irish people or are institutions working against our interests”, McNamara added.

The Minister for Finance Michael Noonan has already stated that he does not intend to recommend the introduction of emergency legislation to force financial institutions to cut mortgage interest rates in line with European Central Bank reductions.