Damning report on banks welcomed
Several banks have indicated they would set up here if the market was more open, Mr Fingleton said.
While refusing to name the banks, he said research into the report led them to identifying several banks that are not in the Irish market, but who would be interested in getting in here if the climate was right.
Mark Duffy of Halifax Bank of Scotland said the report was a godsend.
“It has confirmed everything we have been saying about the Irish market since we came in here” he said.
The “big test” is how the issues of money transmission and the switching debate are going to be handled.
The Competition Authority has made radical proposals the banks will not act upon unless they are put under severe pressure, said Mr Duffy.
Overall the report, if implemented, will bring a better deal for the Irish personal account holder and for small businesses.
“Of that there can be no doubt, but it will only happen provided the government and the Irish Financial Services Regulatory Authority throw their full wight behind the recommendations”, he said.
The Irish Small and Medium Enterprise Association (ISME) was less than happy with the outcome.
The association’s chief executive Mark Fielding said businesses are being charged over 60% more on current accounts compared with the European average and over 40% more on overdrafts.
When all of those charges are combined with the 85million per year over the past three years, the matter becomes doubly expensive for the Irish small business, he said.
The report identifies that SMEs suffer disproportionately in comparison to big business when it comes to lending rates.
It also showed that barriers to entry and switching costs further inhibit competition. However, it patently fails to introduce the adequate recommendations to ensure a comprehensive competitive banking environment to the benefit of all, including the small business community.
“In comparison to the Cruickshank report and the report by the Monopolies Commission in the UK, which undertook a comprehensive study into the provision of banking services to SMEs, today’s study is disappointing.
“It does not go far enough in revealing the extent of coordinated behaviour by the main Irish banks, so clearly evidenced by consistent and sustained overcharging of small business customers,” said Mr Fielding.
In conclusion, he outlined that the association is concerned that this study lacks a “cutting edge” and represents a lost opportunity to introduce proper and meaningful reform to the Irish banking sector, prolonging the plight of SMEs.
He added that the tough stance adopted by SMEs has been vindicated.
