Call for cap on savings rates as pain to fall on borrowers

HanleyS

Well-known member
Joined
Jan 11, 2007
Messages
815
I'm not going to mince my words here...

If the Irish government attempt any such move I will immediately move my savings overseas.

...Philip O'Reilly has not really thought this one through. The deposits are a relatively cheap source of funding.

Call for cap on savings rates as pain to fall on borrowers - Irish, Business - Independent.ie

Indo said:
As an emergency measure, deposit rates should be capped at 2pc by the Government for as long as the European Central Bank rate is 1pc. Then, during this economic crisis, the top deposit rate should track the ECB rate," he said.
 


hammer

Well-known member
Joined
Jul 6, 2009
Messages
58,180
Borrow 3%

Lend - credit cards 16% plus
Overdraft - 12% plus
Personal loans 8% plus

Nice margin
 

sauntersplash

Well-known member
Joined
Feb 3, 2009
Messages
3,444
I'm not going to mince my words here...

If the Irish government attempt any such move I will immediately move my savings overseas.

...Philip O'Reilly has not really thought this one through. The deposits are a relatively cheap source of funding.

Call for cap on savings rates as pain to fall on borrowers - Irish, Business - Independent.ie
This would be perfect. Should this occur, the State will have directly and intentionally hampered every single effort I have made to improve my circumstances in life. I'm just waiting for a "pretty girlfriend tax".
 

laidback

Well-known member
Joined
Jun 3, 2009
Messages
1,134
Savers did not cause the problems we face. They did not take on commitments beyond their means in the boom. They lived within their means and put a few bob aside for a 'rainy' day or to supplement their old age pension.

Interest rates on savings have been relatively low for some time. Our savings normally come from money that has already been taxed, and on the interest we pay DIRT (increased in 2009) and all the various increased levies apply too so the net return isn't great.

That interest rates would be capped to subsidise those who were less financially responsible is unacceptable.
 

Sync

Well-known member
Joined
Aug 27, 2009
Messages
28,605
Ridiculous, unworkable suggestion. Unless the govt were to follow it up with a prohibitive tax for removing money from the country, anyone with sense will save offshore.

And that's the frustrating thing. People well above the AIW wouldn't get caught like this, they'll move to Nationwide, make more, while the less educated keep theirs in Irish banks earning less, and so widening the gap between rich and poor.

But it's just one suggestion from one talking head. Nothing to panic over.
 

HarshBuzz

Well-known member
Joined
Feb 28, 2008
Messages
11,814

DCon

Well-known member
Joined
May 5, 2009
Messages
5,889
Unless the govt were to follow it up with a prohibitive tax for removing money from the country, anyone with sense will save offshore.
Impossible. EU would never allow it. Businesses would be killed.
 

Sync

Well-known member
Joined
Aug 27, 2009
Messages
28,605
Impossible. EU would never allow it. Businesses would be killed.
Oh I agree fully, it would be the road to Caracas. I'm just saying from a practical pov, it's the only way the idea is workable.
 

ivnryn

Well-known member
Joined
May 20, 2007
Messages
1,303
PEOPLE with money on deposit are being subsidised at the moment and mortgage payers will end up bearing the pain -- unless the Government moves to cap saver rates, a leading broker said yesterday.
What is the subsidy? Is he is referring to the guarantee? If so, then just cap the NAMA banks.
 

SPN

Well-known member
Joined
Feb 2, 2004
Messages
16,845
...Philip O'Reilly has not really thought this one through. The deposits are a relatively cheap source of funding.
Understatement!

This guy clearly has no clue. I wonder what his agenda really is.

For the record, the cost of EURIBOR 30 day money continues to drop. Yesterday it was down to 0.652%

..
.
 

feargach

Well-known member
Joined
Dec 11, 2006
Messages
4,968
I'm not going to mince my words here...

If the Irish government attempt any such move I will immediately move my savings overseas.

...Philip O'Reilly has not really thought this one through. The deposits are a relatively cheap source of funding.

Call for cap on savings rates as pain to fall on borrowers - Irish, Business - Independent.ie
If enough people do the same thing, the matter will be settled: you will have no savings as the bank is insolvent.

In fact, by the time you have made up your mind to flee the bank, the big deposit-holders, the ones who can afford a mole within the bank to warn them of a run, will already have whacked it.
 

johnfás

Well-known member
Joined
Feb 22, 2007
Messages
2,715
Stupid suggestion. It would only result in depositors moving their money to other locations - the net consequence being a worsening of the banks capitalisation.

It could only possibly function if there was a restriction on the movement of capital out of Ireland. Which of course sounds good in theory but given our economic model is an equally ridiculous suggestion as FDI will not flow into a country with such limitations. Even if we are going to build strong domestic business, we will be reliant on foreign capital to support it in the medium term.

It is a no runner. How individual banks wish to set their interest rates is of course an entirely separate matter so there is nothing stopping a bank from offering poor interest rates, it will just lose market position.
 

feargach

Well-known member
Joined
Dec 11, 2006
Messages
4,968
She was standing beside you when you wrote that wasn't she? And she stormed off in a huff because you only called her pretty instead of drop dead gorgeous :)
I doubt his hand stormed off.
 

sharper

Well-known member
Joined
May 3, 2009
Messages
1,027
What is the subsidy? Is he is referring to the guarantee? If so, then just cap the NAMA banks.
He means that borrowers are being charged higher rates by the banks who are forced to pay higher rates on deposits in order to attract capital. He thinks that instead the banks could just pay less to depositors.

Basically he either doesn't know or doesn't care how banks work (or don't work) he just wants cheap credit so he can add his margin and flog it to people.
 

cricket

Well-known member
Joined
Nov 7, 2009
Messages
13,786
At the moment, it would seem state savings which are tax free make more sense than anything else on offer.
Now, if only I had some.
 


New Threads

Popular Threads

Most Replies

Top