THE government could be set to introduce new legislation which would force the country’s banks to pass on interest rate cuts as set out by the European Central Bank.
The move comes after a number of Ireland’s top mortgage providers – including AIB, Bank of Ireland and Ulster Bank – failed to pass on the ECB’s recent 0.25% cut in rates.
Taoiseach Enda Kenny was told on Wednesday by the big three that they are not going to pass the rate The move has seen the Taoiseach direct the Financial Regulator to check how the bank’s behaviour effects competition and whether there would be a good reason to legislate against this action.
Mr Kenny contacted Financial Regulator Matthew Elderfield after Wednesday’s meeting to inform him of the position of the banks.
He also told him that any further support he might require from the Government would be “forthcoming.”
Mr Elderfield has complained in the past that regulators had no direct powers to tell lenders to cut rates, while Mr Kenny has already indicated he will consider new laws to force taxpayer-backed banks to pass on European interest rate cuts.