Action needed, not words

THE Competition Authority’s final report on the banking sector was welcomed by bankers yesterday, but small businesses warned its recommendations needed to be matched with action.

The Irish Bankers Federation (IBF), the industry umbrella group, said it was satisfied banks were making “real progress” in addressing the barriers to competition identified by the authority.

Increased competition in the Irish banking market had already been confirmed by a number of third party independent studies, it said. Bank charges for both personal and small business customers were significantly lower in Ireland than in other markets, it added.

The IBF also said its switching code had delivered and that 10,000 customers had taken advantage of the code to shop around between banks since it was introduced earlier this year.

But the Small Firms Association (SFA) said it was concerned the report’s recommendations would not be implemented.

SFA director Pat Delaney said: “There is a very strong argument for many of the recommendations in this report to be implemented but unfortunately the more likely outcome is that it will gather dust like so many before it. Unless this report can be adopted as a blueprint for action, the exercise has been futile.”

The SFA also rejected the recommendation calling for the eventual removal of regulations that currently govern bank charges.

Banks are currently required to notify their charges to the Financial Regulator and can only increase their charges beyond the agreed level on payment of a hefty fee.

The authority said Ireland was one of just two countries to have such a system in place, but the SFA said the current rules protected customers from banks that wished to hike charges.

Small business lobby group ISME said the report failed to address the need for reform of the banking system.

ISME chief executive Mark Fielding said: “Today’s report is disappointing and does not go far enough. The sad truth is that we now have an official report from a state agency, almost exonerating the banks, while the whole country knows of the wholesale gouging that is carried out under the guise of competitive’ Irish banking.”