Banks charging too much for loans - CIF
Monday, 3 November 2008 19:32
The Construction Industry Federation has written to the Governor of the Central Bank, the Financial Regulator and the Minister for Finance to complain about moves by banks to increase their margins on existing business loans despite the fall in the cost of borrowings.
The letter outlines concerns raised to the CIF by its members about attempts by financial institutions to renegotiate higher rates on existing loans.
In the letter, CIF Director General Tom Parlon states, 'The moves by European Governments to buy stakes in banks and guarantee bank-to-banks loans are resulting are resulting in lower borrowing costs for banks. . . However, whilst the cost of borrowing is falling, banks are seeking to increase and in some cases double their own margins on existing business loans.'
Parlon claims that the Government guarantee scheme is not doing what it was designed to do.
'Government intervention in the Irish banking system was designed to support the economic life of the country - not as an opportunity for banks to increase their own margins on the backs of existing customers,' he said in the letter.
