Regulator to decide on need for rate cut laws

ENDA KENNY has ordered the Financial Regulator to report to the Government on the need for enhanced powers after Irish banks snubbed an appeal to pass on reduced interest rates to mortgage holders.

It came as Finance Minister Michael Noonan said Europe was trying to avoid a second recession and it was difficult to see why Irish banks would not pass on reduced rates.

The refusal by Bank of Ireland, AIB and Ulster Bank is likely to anger homeowners and could leave the Government with no choice but to bring in laws to make sure ECB rate cuts are passed on.