ISME calls on Government to insist on banks passing on reduction.
Bailed-out banks must not stymie Targeted Measures for Irish SMEs.
ISME, Thursday 5th June 2014.
ISME, the Irish Small and Medium Enterprises Association, welcomed the ECB decision to reduce interest rates today (5th June) to 0.15%. The rate cut, if passed on by Irish rescued banks, will assist local SMEs. However the Association doubted that the recently bailed-out banks would do the honourable thing, as self-preservation and profit greed were their main trading motives.
ISME Chief Executive, Mark Fielding, commented, “This decision by the ECB to address the risk of deflation and to introduce stimulus initiatives is overdue and welcome. The question now is will the Irish Government follow through and strongly insist on interest rate reduction from Irish based banks”.
“A negative deposit rate of -0.10%, which forces the banks to pay for holding money, is introduced to encourage banks to lend. The SME sector is not expecting much from this initiative and we wonder which greedy Irish based bank will be first to attempt to pass on this charge to its depositors rather than increase lending, as is the purpose of the move.” “If this Government has learned anything from the recent elections, it will insist on the banks passing on the interest rate cut and stop them charging for money on deposit. That action would send a message to business and to the country that we have an administration capable of governing and serious about trading out of the recession,” concluded Fielding.