Banks must pass on ECB rate cut
New ECB president Mario Draghi didn't waste any time signalling a break from the policies pursued by his predecessor Jean-Claude Trichet when he announced a surprise 0.25pc cut in official eurozone interest rates yesterday.
In truth, Mr Trichet's record during his seven years at the helm of the ECB was truly lamentable. Not alone did he insist on increasing interest rates in 2008, despite clear evidence that the European and global economies were entering recession, he repeated the mistake this year.
Now that ECB interest rates have been cut with the promise of further rate cuts to come, will Irish lenders pass on these lower rates to their unfortunate variable rate mortgage customers? Financial regulator Matthew Elderfield has already signalled a halt to banks raising their mortgage rates in the absence of ECB rate hikes. Now that the ECB has cut its rates he must insist that the banks pass on the savings to their customers as quickly as possible.