Ever since the financial crash, banks have been plagued by suspicion and distrust. Unfortunately, these clouds of doubt have only grown darker over time. The tracker mortgage scandal alone saw over €700 million paid out, along with substantial fines. Now, our once-reliable financial institutions are facing criticism for their paltry deposit rates, if they even offer them at all.
Further Education Minister Simon Harris has expressed his outrage at the banks’ sluggishness in passing on interest rate increases to savers, calling it “utterly offensive” and accusing them of being “complete and utter laggards.” John McGuinness, chairman of the Oireachtas Finance Committee, has also launched a scathing attack, highlighting the failures of leadership within the Government, the Central Bank, and the European Central Bank. He demands that the banks be managed in the best interests of society.
So far, the banks have only responded to government orders. However, any bank that believes it can continue to act unfairly and disregard public trust will soon learn that customers will not tolerate such behavior indefinitely.
If no action is taken, there will undoubtedly be a backlash, and the Government itself risks being caught in the crossfire. One proposed solution to reign in the banks is the implementation of a bank levy.
While the need for financial literacy is often emphasized, perhaps what those who run our banks truly need is a bit of emotional intelligence and human empathy. These qualities could spare them a great deal of grief.
With the cost-of-living crisis and rising interest rates, the pressure on people’s incomes is steadily increasing. While banks claim they have held back on raising some mortgage rates, it must be noted that Ireland already had some of the highest rates in the EU for many years. Thus, this concession is the least the banks can do.
Recently, ratings firm DBRS Morningstar reported that the three Irish banks have achieved “exceptionally strong results,” with a combined income of over €1.7 billion in the first half of the year. This success can be partly attributed to the deposits they place at the European Central Bank and the deposit rates they offer customers.
Padraic Kissane, a member of the Banking Culture Board, stresses the importance of fairness and trust. He argues that depositors should be appropriately rewarded for their money, which is currently not happening.
Rose Conway Walsh, Sinn Féin’s representative in the Oireachtas Finance Committee, reasonably questions why the Finance Minister is not engaging in discussions with the Central Bank and retail banks to resolve these issues.
While banks, like any business, are entitled to generate profits, they should not exploit their customers in the process. Fairness and transparency must be at the forefront of their operations.
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