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Banks Lobby Government to Force An Post to Reduce Interest Rates


irishproduce

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Jun 1, 2009
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438
I found this a bit mad!

Essentially, the main banks have been lobbying the Gov to get An Post to reduce the attractive interest rates they offer because they are unable to offer similar.

See here:
Banks lobby for An Post to cut deposit rate | Irish Examiner

I work in Telecommunications and the only way that I could compare this would be if my employer approached the regulator and asked that they force another operator to stop giving free internet/ data because we are unable to compete with that.

The regulator would tell them where to go very quickly!

I despair and hope that at times like these, that we are protected by some EU rules or something!

I should state for transparency, my wife and I have some savings with An Post (And Ulster Bank)

irish
 


D

Dylan2010

yeah, had to lol. no you must give us your deposits at supressed rates, we only give good rates to foreign bond holders......
 

Cooperate for freedom

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The fact that an post accounts do not attract DIRT at 33% gives a hefty advantage over banks. That being said bond holders dont pay DIRT so seems reasonable that jo public can do the same when lending the government money.
 

Analyzer

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Competition is unacceptable to those bastions of crony capitalism, the Irish banks.

We need new banks in the Irish market.
 

cricket

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They have some neck, especially those banks on life support from the taxpayer !
 
D

Dylan2010

it highlightes another problem, I thought saving was bad and should be discouraged, the whining by the banks implies its important that people continue to save in particular with them.
 

gerhard dengler

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Competition is unacceptable to those bastions of crony capitalism, the Irish banks.

We need new banks in the Irish market.
In a market screaming out for a reasonable return on depositors savings and in a market in which credit is very tight, one would have assumed that the government would be looking to create competition. Ha!
 

ShoutingIsLeadership

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By the way, does anybody know where I might get information on the historical ECB rates since 2002, and bank mortgage rates for that period?

Thanks.
 

irishproduce

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In a market screaming out for a reasonable return on depositors savings and in a market in which credit is very tight, one would have assumed that the government would be looking to create competition. Ha!
But you can also see why the Gov might be inclined to fold on this one and give the banks what they want?
 

Analyzer

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By the way, does anybody know where I might get information on the historical ECB rates since 2002, and bank mortgage rates for that period?

Thanks.
Well...I suppose we could say this....they were low enough to encourage asset bubbles, and speculation.

The results, when we look at borrowing binges in Ireland, Spain, Greek debt, etc... speak for themselves.

And now there are asset bubbles in Finland and Western Germany.
 

Mushroom

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I thought competition was good for the consumer?

"shop around" and all that?

Indeed it is - but some key requirements for competition are a level playing pitch and consistency of the rules/laws governing the marketplace.

For me, it's ridiculous that the State is offering a significantly more attractive return on deposits than the commercial banks are able to. It's a distortion of the marketplace and, given that the State can borrow funds on the markets at lower rates than the Banks can, it seems quite unnecessary [and I write this as a saver with a large sum invested in State Savings].

After all, the more expensive it is for the banks to borrow money, the more interest that they're going to have to charge customers with mortgages or overdrafts? So, who wins here?

Also, in the case of the banks where the taxpayers has a stake, the unavailability of cheap funds means that the banks are less profitable which makes it more difficult for the Government to sell its stake off or get any dividend for the exchequer.

In summary, the borrower loses, the exchequer loses and the wealthy depositor gains.
 

irishproduce

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In response my OP, does anyone know if we are protected by EU rules or anything, as a society, from banks coming together to lobby Government to force policy on a competitor?
 

Mushroom

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In response my OP, does anyone know if we are protected by EU rules or anything, as a society, from banks coming together to lobby Government to force policy on a competitor?
Or, more sensibly, can anyone advise whether the banks could ask the EU to block the State from distorting the deposit taking marketplace. By exempting the interest received on State Savings from DIRT, the Government is effectively providing a form of subsidy to one form of borrowing, which must be contrary to EU Competition Law.
 

clearmurk

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Or, more sensibly, can anyone advise whether the banks could ask the EU to block the State from distorting the deposit taking marketplace. By exempting the interest received on State Savings from DIRT, the Government is effectively providing a form of subsidy to one form of borrowing, which must be contrary to EU Competition Law.
or, by acting together to establish broadly low deposit rates, can anyone advise whether the banks are acting as an illegal cartel....
 
Last edited:

Mushroom

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or, by acting together to establish broadly low deposit rates the banks are acting as an illegal cartel....
No. They're all in fierce competition with one another for deposits as THIS LINK shows.

Also they're all on the same playing pitch where payment of DIRT is concerned; only certain State Savings products are able to offer DIRT-exempt savings products.
 

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