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A SPOKESPERSON FOR the Department of Finance has told The Journal that the Government cannot intervene with the interest rates Irish banks are currently paying savers.
Irish banks are currently the worst at pasing on rate gains to savers when compared to the UK, the US, the Eurozone and 18 other European countries according to S&P Global ratings as reported by The Financial Times.
The European Central Bank’s main lending rate now sits at 4.25%, the highest it has been since 2001.
Despite nine consecutive interest rate hikes by the European Central Bank this year, Irish banks have been much quicker at passing this rise on to mortgage borrowers than they have been at passing it on to savers.
According to Irish comparison site Bonkers.ie, the best rate available for a monthly saving account with Irish banks at the moment is 2% AER.
In the UK, members of parliament (MPs) have been actively pushing UK banks to pass a higher savings rate back to bank customers.
The UK’s Treasury Committee has been in touch with the heads of UK banks since February of this year in relation to the issue.
Last month, MPs on the committee wrote to bank bosses accusing them of failing in their “social duty” to promote saving and instead engaging in “blatant profiteering” by continuing to offer low rates.
According to data from July, the average one-year fixed savings rate in the UK stood at just over 5%.
Speaking to The Journal, a spokesperson for the Department of Finance said the interest rates set by banks is a “commercial decision” for them to make.
“It is not something the government can intervene with, it is their decision to make,” the Spokesperson said.
However, opposition party TDs have said the government can and should do more.
Independent TD for Tipperary Mattie McGrath said: “the Government’s passive approach is enabling a raid on savers’ pockets.
“Despite hefty interest rate increases by the ECB, Irish banks have been sluggish in passing on the benefits to savers, leaving them with only negligible increases, if any at all. At the same time, these banks have been swift in implementing painful mortgage rate increases, further adding to the frustration and anger of bank consumers.”
“Other European countries, including Spain and France, have taken a strong stance in insisting that banks pass on deposit rates. However, the Irish government’s lack of proper oversight within our banking sector has resulted in Irish savers losing hundreds of millions in lost interest payments.”
Speaking about the issue last week, McGrath called on the Department of Finance and the Central Bank of Ireland to take “immediate action” to “ensure fair treatment of customers”.
“We believe that a comprehensive ‘savings charter’ that fosters deposit competition, ensures transparency, and facilitates easier account switching for better rates should be immediately implemented on a statutory footing,” McGrath said, speaking on behalf of the rural independents group of TDs.
At the end of July, Bank of Ireland reported pre-tax profits of €1.02 billion for the first six months of the year.
Meanwhile, AIB updated its guidance after a surge in income, and now expects profits of about €1.2 billion for the first half of 2023.
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Yet they pumped billions into them to save them from ruin and now the shoe is on the other foot they run for cover
@Paul: no fan of banks, but the two pillar banks repaid in their loans in full plus interest
@Roj Blake: and we have paid for the m50 years ago be we still have to pay every time we use it the banks should be paying back forever as if no loan was given they would of crashed and burned
@Roj Blake: incorrect, tax payers are still owed roughly 4 billion from these banks in real cash terms but does does not include the interest paid on borrowing to support the bailout. Also the state pension fund that was raided lost out on potential growth gains too!
@Roj Blake: You me and everyone else has suffered big time because of them. They may have repaid the government a large sum but don’t forget about how much more taxes we’ve all paid since then as a result. USC still here, higher PAYE, property tax….etc. What has the public who have been forced to pay extra to keep the country going been repaid?!?! Terms and conditions in many workplaces haven’t recovered. Banks are back to billions of profit and look at those interest rates! Creaming it again off the public and not bothered to pass on the appropriate savings rates to hold our cash!
@Roj Blake: Legalized loan sharks. See Collapse of Irish Economy Predicted in 1998 RTE TV clip on yt
@Roj Blake: I wonder where that all went and why is the country’s deficit getting worse it’s in the hands of clowns and gluttons who care little for the everyday Joe soap in this country that’s for sure they’re not in touch with reality at all
@Gavin Kelly: I hope you checked with bob or the weasel before you jazzed up the thread. They are the authority on intellect around here.
@Roj Blake: that’s one sweeping and factually incorrect statement! Our banks have not repaid their debt to the taxpayer. Sadly the banking debt still remains, €200bn +
@David Owens: multiples of 4bn
@Roj Blake: they paid no interest or tax since bailout
I thought the banks were regulated by the Central Bank. What are they doing?
@Shakka1244: NOT A LOT
@Shakka1244: they couldn’t regulate water from the turn handle of a tap been proven,my mortgage was with Ulster Bank now gone to AIB,now it’s gone up and aib say it was miscalculated by Ulster Bank and I would have incurred a lump sum charge at the end of it they had it wrong,but guess what Ulster Bank can’t be touched now they’re gone and central bank weren’t regulating anything in there cos the woman in aib I talked to told me it’s effecting a lot of people,so great work done there and no penalty as usual absolute joke.
Legalised theft
Scam artists every last one of them.
TSB have just ordered all their customers to leave 2500 per quarter in their accounts or they will be charged a fee for not complying.
2500 grand times how many = loads of your cash for these scam artists to play with, and in return you get nothing but a part time bank
Yes journal my comment is toxic, but it is also the truth!
@David: Also that punishes the person who can’t afford to leave that much in their bank account, the less we’ll off, while those with money over €2,500 won’t have to pay the bank charges the poorer people do. Not fair but then banking never is.
@David: open a Revolt or N26 account
@Mayo seem to be the football equivalent of Waterfo: They’d have to be a combination of being too poor to afford it and too lazy to move. Same applies to low interest rates
@David: absolute nonsense that is David. Get your facts right.
Are the banks operating a cartel?
Cannot intervene but can when they loan recklessly, you can’t make it up ! Banana republic
why dont they implement a windfall tax on interest income earned between the differential between loan rates and savings rate just like they have done in italy, spain and other european countries.
@Niall English: The massive salary the banks are paying to that weasel Hayes is moneys well spent, his FG mates won’t upset him by going after the banks,
My savings account is doing real well but surprise, surprise, it’s not based in Ireland!
@James Carroll: where is it
@James Carroll: You can keep your cash in EU banks where you can get upwards of 4%. Look up Raisin.ie. There are different risks but there are choices out there to getting stiffed by the Irish banking cartel.
No wonder Bertie Ahern never had a bank account with all this carry on.
@UCD Trinity: true, he was way ahead on that pity the rest of us weren’t
Extraordinary what they can’t do
Giorgia was able to intervene.
Can they intervene in something like the post office. Interest rates their are shocking. Or is the post office controlled by the central bank?
The lowest rates being payed out of the US, UK, Eurozone and 18 other European countries. Typical Ireland. One thing I do remember from the Celtic tiger days and that reared its head very clearly then was that there is a lot of greed in this country. It filters into everything. The banks are basically a disgrace. They bankrupted the country and we’re still telling anyone who would listen that everything was fine up until the cliff edge. They wiped out people’s pension, cost us billions in bailouts, illegally stole tracker mortgages from people who lost their homes and had their lives ruined and of course are failing to treat customers fairly on deposit rates. They were already charging the highest mortgage rates in Europe before rates started rising. No individuals are ever heard accountable. It’s not good enough.
A number of years ago the government charged dirt tax on Bank Accounts interest and Credit Union dividends,so no interest paid to savers,and never gave it back-it’s about time they did
Nonsense
The government owns AIB.
They can set whatever rates they want and other banks would follow when every one leaves to go to AIB
That’s totally, entirely, completely and utterly untrue.
Never forget what Lenihen said…. ‘ we all partied ‘…. that’s what they think of us. Forget budget giveaways it’s only your own money coming back…. ie cutting the USC.
9 interest rates in a row but they can’t pass on savings
Savers should not be subsidizing people who bought homes they can’t afford. Move your money out of Irish banks and get a decent rate.
The fact that banks haven’t increased savings rates is a good thing because if they did the mortgage rates would be even higher – they give with one hand and take with the other – either way they make a profit
The Quicker Trump is back to implement the Quantum financial system the better.
I have a garage full of ZIM and Dinar currency waiting for the big re-evaluation.
I have 7 one hundred trillion dollar ZIM notes which I purchased of 90 US Dollars each 2018. I let you do the math when Trump levels the currencies on parity.
I will be outside AIB with a 40′ container ready to exchange on par…
Im not interested in crumbs from the elites table who will all be sent to gitmo by Trump
Can’t interfere with central bank interest rate rising crippling people either while some claim earnings have gone up,that’s bullcrap it hasn’t for a lot of people we’re being hammered again where is all this extra money being charged going to exactly I’d like to know and is tax being paid on it I doubt it?
How about the 41% exit tax on EFTs? Is that something the Irish state can intervene with?
Iam 26 single and looking for love
Bunch of scammers
HI Roj how are would love to get to know you
May consider CFD trading. Would probably provide a better return than irish banks!
Weak government
Try to save in a Czech bank upto 6.5% but it’s in CZE crowns.
‘cant’ or ‘wont’
big difference
this post is courtesy of no caps
as a protest, in the form of alpha text……………
The government can affect the deposit interest rates, they can raise the deposit interest rate at the An Post bank. This would cause a movement of cash deposits from low deposit interest rate to An Post. The banks would have to buy in money at the higher rate from the ECB to keep adequate reserves at hand.
What the government could do, and should do, is allow A Post to offer better interest rates to savers and depositors.
The Banks would complain but with their massive profits now, their argument would be weak.
We can bail them out though
Start moving your money folks..
Puppets can only do their masters bidding.
The Government has some neck cretasising the Banks when they are only paying amiserable 1% on savings with the Saving Bonds its a case of kickie horse kickie foal.
You really need to not have any extra cash in the bank, just what you need for bills day to day etc, anything extra needs to be removed.. convert savings to something like Gold or even better Bitcoin as a store of value/savings mechanism.. it is simply the smartest move you can do for your future… Traditional banking/fiat money is dying..
Everybody seems to forget that banks are bound in law to provide returns to their shareholders. That is the way capitalism works, love it or hate it.
If you want banks to have the depositors’ interests first, either demand privatisation via the ballot box or bank with a credit union.
Whinging achieves nothing at all.
have your say