Banks must be made to act on mortgages
Published 01/05/2015 | 02:30
The Government threatened to act against the various banks if they did not bow to pressure to ease standard variable rates for mortgages holders.
They didn't - and now the time for talking is over.
The State-owned AIB - which reported profits of over €1bn for 2014 - has signalled it will cut rates and Permanent TSB, which is also largely owned by the State, is likely to follow, reluctantly. But Ulster Bank and the Bank of Ireland have said they cannot cut rates, or commit to cutting them. The State's dilemma is that while it is trying to 'fatten' up the State banks for sale, cutting profitability at the same time would appear to be counter-productive.
But the Government is in a very strong position. The banks that are now proving so stubborn were bailed out by the Irish taxpayer, who is now - it would appear - being snubbed for their troubles.
Minister for Finance Michael Noonan is going to look very weak unless he can find some way of bringing the banks to heel. The government intimated that it will take action against the banks - it is now time to make good on this threat.