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Kenny condemns banks’ refusal to cut variable rates as ‘unacceptable’


Enda Kenny

Enda Kenny

Enda Kenny

The Coalition has hit back at two of the country’s biggest banks, which are refusing to pass on savings to consumers, by condemning their behaviour as “unacceptable”.

Speaking yesterday, Taoiseach Enda Kenny said that the banks were bailed out for the benefit of the taxpayer and not themselves. Mr Kenny insisted that they should now lower variable mortgage rates.

“It is not acceptable behaviour, I believe that it’s wrong that the banks don’t pass on lower interest rates,” he said.

“From an ethical point of view, now that the banks have been restructured and are on their way to making a profit again it’s just not acceptable that when they themselves can borrow at much cheaper rates that they continue to have higher rates applied to mortgage holders.”

His comments came after two of the country’s biggest banks, Ulster Bank and Bank of Ireland, signalled that they had no plans to cut interest rates on their standard variable rate mortgages.

The two banks are benefiting from historically low interest rates from the European Central Bank, so pressure had been growing on them to pass those savings on to customers, although neither have moved to do so as of yet.

Tanaiste Joan Burton said  the Government would consider taking action to ensure that low interest rates are passed on to consumers, saying that “gratitude will only get you so far with the banks”.

“There are many options available to the Government, which we will examine in due course. There are mechanisms of dealing with the banks, which I have referred to on a number of occasions,” she said.

The Taoiseach and Tanaiste were speaking at the launch of the Government’s quarterly report on the action plan for jobs. Finance Minister Michael Noonan is currently awaiting a report from the Central Bank on variable mortgage rates.