Taoiseach and Tánaiste hit out at banks for failing to cut mortgage interest

The Taoiseach and Tánaiste have borth criticised Bank of Ireland and Ulster Bank for failing to pass on low interest rates to their mortgage customers.

Taoiseach and Tánaiste hit out at banks for failing to cut mortgage interest

The Taoiseach and Tánaiste have both criticised Bank of Ireland and Ulster Bank for failing to pass on low interest rates to their mortgage customers.

Enda Kenny said the lenders’ stances on the matter is not acceptable, while Joan Burton said banks were not being "grateful" for taxpayers' contributions.

The comments come ahead of a long-anticipated meeting between Finance Minister Michael Noonan and the four main mortgage lenders next month.

Yesterday’s declarations by both Bank Of Ireland and Ulster Bank that they had no plans to cut their variable mortgage rates angered many borrowers, and comes at a time when both lenders are posting improved profits.

Both Bank of Ireland and Ulster Bank are benefitting from historically low interest rates from the European Central Bank, so pressure had been growing on them to pass those savings on to customers.

Taoiseach Enda Kenny said their refusal to do so was morally wrong.

"It's not acceptable behaviour," he said. "I believe it's wrong thank banks do not pass on lower interest rates that they themselves have," he said.

Finance Minister Michael Noonan is waiting for the Central Bank to finish studies on what a reduced variable rate could look like.

He plans to take that with him to meetings with each of the big four mortgage lenders next month, and put more pressure on the banks to help their struggling customers.

The Tánaiste, Joan Burton, said it might be time for a tougher stance.

"Gratitude only gets you so far with the banks. I've never known bankers to be particularly grateful sorts of people - so maybe it's slipped their minds that taxpayers, all of us … saw considerable cuts in our take-home pay in order to fund the recovery of the banks."

It remains to be seen what action if any will be taken by the government if the lenders do not comply, but higher bank levies is one measure discussed by government officials.

Bank of Ireland said its products are priced to reflect its capital and costs needs, while Ulster Bank is yet to respond.

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