Kenny yet to act on rate cut failure

ENDA KENNY has admitted he has done nothing to prepare legislation that would force banks to pass on interest rate cuts to variable mortgage holders.

In an admission likely to infuriate struggling home owners, the Taoiseach said that no such legislation had been drawn up because the Financial Regulator, Matthew Elderfield, had not requested it.

The lack of legislation comes despite billions of taxpayers’ money being pumped into the banks and coalition promises to secure interest-rate cuts for variable mortgage holders.

Questioned on the issue by Fianna Fáil leader Micheál Martin in the Dáil yesterday, Mr Kenny said: “I haven’t prepared legislation and I’ll tell you why.

“Mr Elderfield said some time ago that if he was having difficulty with the banks in their passing on interest rate reductions that he might well seek support from the Government.

“I haven’t had contact with Mr Elderfield since.”

Mr Kenny said if the regulator came to the Government seeking assistance, he would “certainly be prepared to engage with him with a view to increasing his powers of authority”.

But his response was derided by opposition TDs, who asked why Mr Kenny was waiting for the regulator before acting.

Mr Martin said the Government had reneged upon “every single commitment” made to mortgage holders.

He said the banks would not believe anything said by the Taoiseach unless legislation was published.

“Otherwise they will thumb their noses at you,” said Mr Martin.

He added that it was “incredible and unbelievable” that the country’s two largest banks, AIB and Bank of Ireland — both recapitalised by the taxpayer — had yet to say if they would pass on last week’s ECB interest rate cut.

“There should be no question of what they should do on this and the Taoiseach should make this clear,” said Mr Martin.

Ulster Bank has also yet to say if it will pass on the cut.

All three banks are due to meet with the Government’s economic management council — made up of the Taoiseach, Tánaiste, Finance Minister and Public Expenditure Minister — today.

The meeting was originally called to assess if the banks were meeting business-lending targets, but will now also discuss the interest rate issue.

EBS yesterday joined Permanent TSB, KBC and the former Irish Nationwide in confirming that it would pass on the interest rate cut.