FT: Irish Banks Passing On Just 7% of Rate Gains To Depositors. Worst in Europe.

Freelance said:
This does not justify or make right the fact that the state is paying its bond holders a huge multiple of what is is paying its most vulnerable and least financially literate depositors.
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Yes and No. The rate the government is paying bondholders does not put any pressure on banks to raise deposit rates, as people are not going to (or can't) transfer their savings from banks to bonds. An increase in State Savings may well have some impact and would likely precipitate a corresponding rise in bank deposit rates. And more pressure on mortgage rates.
 
Early Riser said:
Yes and No. The rate the government is paying bondholders does not put any pressure on banks to raise deposit rates, as people are not going to (or can't) transfer their savings from banks to bonds. An increase in State Savings may well have some impact and would likely precipitate a corresponding rise in bank deposit rates. And more pressure on mortgage rates.
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Agreed. And I see no issue with that. Mortgage holders shouldn't be cosseted at the expense of small depositors. It is inequitable to treat small depositors badly simply because they are financially illiterate or vulnerable or can't avail of an alternative.
 
Freelance said:
In other words the pillar banks plus Raisin, BUNQ, Advanzia and Lightyear etc

I was hoping that "there are alternatives the median Irish consumer is too lazy or too disengaged in their own finances to do something about it" amount to a bit more than this.
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Listen how many options do you want/need for a commodity activity like a savings account…..it’s like asking for different variety’s of white sugar….there are higher deposit products available….people aren’t bothered so far in pursuing them. That’s on them….what you looking for someone to go door to door signing people up.
 
Freelance said:
I wasn't asking for anything other than clarification of what the previous dot ridden post was alluding to. I hoped that it was something other than this jaded list. Sadly not.
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Shamelessly cut and paste from another thread but the following gives you some idea of the list of possible deposit takers operating in the State. Not all of them will offer retail deposits but it is an avenue for competition.

 
Gervan said:
Is this any help?
Deposit interest overview for European banks: thebanks.eu/compare-banking-products/time-deposit-accounts
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Thanks but having waded through that list of "69 offers from 60 banks in 19 countries" there is precisely 1 (one) offer that this available in Ireland, J&T Bank (Czech) which is also available through Raisin.
 
letitroll said:
Listen how many options do you want/need for a commodity activity like a savings account…..it’s like asking for different variety’s of white sugar….there are higher deposit products available….people aren’t bothered so far in pursuing them. That’s on them….what you looking for someone to go door to door signing people up.
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I didn't ask for anyone to go door to door. I simply wanted to be clear if your vague assertion that "there are alternatives the median Irish consumer is too lazy or too disengaged in their own finances to do something about it" concealed some hidden knowledge or was just a lazy sideswipe. I'm clear on that now, thanks.
 
Freelance said:
I'm clear on that now, thanks.
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yep lazy sideswipe.....but one with truth in it ;)

As other posters have said mortgage holders ought to be thanking the lazy Irish savers......whats occuring is effectively a wealth transfer from one group to the other.......its kind of equitable transfer......the savers skew wealthier with their homes likely paid off eons ago........the mortgage holder skews working poor with childcare and god knows whatever other costs.......to the extent that banks choose whom to 'help out' as they make commercial decisions......they are making the right choice here......the added bonus is that by doing so they are also supporting especially new housing activity across the interest rate cycle.....the last thing this country needs is a mortgage interest rate spike pushing mortgages and by extension new housing demand off cliff such that developers become cautious.'

What we need is a profitable robust banking system that can lend through the next cycle......I'll begrudgingly give the banks their bumper profits if they demonstrate an ability to support the economy, developers & prospective mortgage customers during the next recession. Instead of burning the furniture to stay warm as they've done in the past.
 
DK123 said:
Spanish banks have also been strongly warned by the economics ministers to be fair instead of greedy and to pass on interest rate rises to savers as has been the normal over the years.[my humble contribution]
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See David Mc Williams article."Irish banks are at it again,cheating savers out of there own money"Irish Times'one day ago.Interesting,methinks.!
 
DK123 said:
See David Mc Williams article."Irish banks are at it again,cheating savers out of there own money"Irish Times'one day ago.Interesting,methinks.!
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The article is here: https://www.irishtimes.com/opinion/...-it-again-cheating-savers-out-of-their-money/

Charlie Weston had a article on this topic this week too:
m.independent.ie

Should we impose a windfall tax on grasping Irish banks?

Greedy retail banks in this country are making off like bandits.
m.independent.ie m.independent.ie

Good to see media attention on the topic of Irish banks ripping off savers. Especially when prior articles just copy and pasted misleading bank press releases.

The Minister for Finance is also quoted today saying that banks should treat savers fairly. Also some articles are questioning if the CBI should intervene.

Will this pressure make any difference? Will AIB/BoI/PTSB/NTMA act?
 
Lightning said:
The Minister for Finance is also quoted today saying that banks should treat savers fairly. Also some articles are questioning if the CBI should intervene.

Will this pressure make any difference? Will AIB/BoI/PTSB/NTMA act?
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The Minister for Finance doesn’t need to wait for NTMA to act, nor does he need to apply pressure to NTMA and wait to see if it makes a difference. He has the power to direct NTMA to act. As usual he is trying to play both sides of the game.
 
Lightning said:
The Minister for Finance is also quoted today saying that banks should treat savers fairly. Also some articles are questioning if the CBI should intervene.
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In case this leads anybody to the conclusion that the MOF actually cares a jot or has any intention of acting, it is worth showing the quote in context:

Irish banks have also come in for criticism for not passing on all of the rate rises to savers deposit accounts. Asked if the government could do anything to force the banks to pass on those rates, McGrath said it can’t.

McGrath said that as Minister for Finance, he cannot intervene in the commercial decisions of the banks when it comes to the rates paid on savings accounts.

“From the government’s point of view, we expect both borrowers and savers to be treated fairly when it comes to interest rates,” he said.
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Yet no mention of how the States own savings product rates are also lagging the market rates... I would put it out there that if the rates on these went up the banks would have to follow suit to remain competitive for savers.
 
Increase state savings products including demand deposits through the post office. After that, people either move or they don't. Enough people move, the banks will respond.

More productive than soundbites on television.....

How come the banks are treating savers unfairly but they aren't coming out criticising NTMA for doing exactly sane thing....

They also need to be careful. Banks reprice their deposit book, wait and see what they do on the loan side including SME loans. Everyone fixates on mortgages but a loan book is more than mortgages.
 
The billions invested in Post office Savings accounts (receiving .05% currently) and the billions invested in Prize Bonds (receiving .35% currently) are saving the State a very considerable sum. If it didn't have these deposits it would be looking for the equivalent form the markets. At the bond auctions in June, the state paid 1.3% to 1.5% (Yield 2.84% and 3.36%).

The State is preying on most vulnerable and least financially literate depositors in a manner that is totally unfair and devoid of fairness. And it is refusing to act to bring some fairness to the situation when it has the means to do so.

Mortgage holders have seen considerable increased over recent months. By leaving depositors stew, the ones profiting today are the retail banks and the state. The stats are in from around Europe and the treatment of depositors in this country is pretty much the worst in Europe.
 
Brendan Burgess said:
Does the Irish state need more investment in savings certs?

I doubt it.

Brendan
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Banks don't need more deposits either. So they have no incentive to compete. Retail funding still cheaper for the state than bonds or short dated bills.

Doesn't really matter though. If they are so angry about those nasty banks, do something about it. They have an option. Instead talk of increased levies and taxes with politicians jumping on the bandwagon by giving tv interviews seems to be their plan of action.
 
Brendan Burgess said:
Does the Irish state need more investment in savings certs?

I doubt it.

Brendan
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The optics are appalling. It's disengenuous of anyone in government to criticise bank behaviour, when they too are cashing in at depositors expense.
The State/exchequer will also profit from the continuence of the levy on banking profits. Depositors won't.
 
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