Taoiseach Enda Kenny has said he is prepared to consider introducing legislation to compel banks to pass on interest rate cuts to consumers.
Three financial institutions, Permanent TSB, KBC Bank and the IBRC, have announced they will pass on the cut in interest rates announced by the ECB yesterday afternoon. IBRC said variable rates for Irish Nationwide customers would fall to 4.15% from November 16.
The Central Bank has urged all banks and building societies that increased rates in line with the ECB rates to ensure that borrowers benefit from the reduction as well.
The Taoiseach told the Small Firms Association lunch today that he will be calling in the banks next week to query why businesses have been unable to access credit. He noted that the banks had previously promised that €6 billion would be made available to lend to businesses.
Referring to yesterday's interest rate cut by the ECB, he noted that some months ago, financial Regulator Matthew Elderfield had recommended that rate decreases should be passed on to mortgage holders by the banks.
He said that if Mr Elderfield came to the Government seeking legislative assistance in that regard, the Government would consider it in the interests of people who were clearly distressed. However, he said they have to distinguish between those would can not pay and those who will not pay.
Speaking about the euro zone crisis, he said that there was a real palpable concern about a potential catastrophe. While he was not sure what would happen in Greece this evening, he hoped that a decision would be arrived at quickly and conclusively in the interests of the people of Greece and Europe generally.
He said that at a time of uncertainty and confusion, it was very important to have decisiveness and a calm approach about what to do to rectify the problems - as they had implications not just for Ireland but for all countries.
