Cabinet bid on mortgage rates 'queering' bank pitch, says NCB
THE Government's attempts to force AIB and Bank of Ireland to pass on the European Central Bank's interest rate cut may scare off potential investment from the private sector, a top analyst warned yesterday.
NCB Stockbrokers' Karl Goggin criticised the perceived state interference, which resulted in AIB passing on the ECB's rate cut, even though it had not passed on the previous two hikes from the so-called lender of last resort. NCB warned such a move made it less likely for the banking system to return to normal in the near term.
"The Government has to allow the system to function. It is extremely negative when you have a politicising of the rate setting mechanisms," he said.
"(It) cannot pretend that it would like to have a banking system capitalised by the private sector while at the same time retain the right to tell the private sector explicitly how to run its business," he added.