Rate cut: Banks must be penalised, say Labour

THE Government must penalise banks for failing to pass on the latest European Central Bank’s (ECB) 0.5% cut in interest rates to customers, Labour insisted last night.

Banks will pay the Government a €100 million levy this year but this must be increased substantially if they refuse to give their customers the benefit of the latest ECB interest rate cut, according to Labour.

Finance Minister Charlie McCreevy was more cautious, but he did not rule out penalising banks in the next Budget if they fail to drop their interest rates.