AS I SEE IT
Money and morality make strange bedfellows, and there is no telling how that relationship will work out in different situations. And there have been plenty of examples of different attitudes in the last couple of weeks to the stuff that makes the world go around.
I used to love the story of Robin Hood and his Merry Men who robbed the rich to give to the poor, lived sustainably in Sherwood Forest and were the scourge of the Sheriff of Nottingham who was enforcing unjust taxes on people. Robin was just doing a spot of income redistribution before there were tax inspectors to do the job, nothing wrong with that.
There was more than a touch of Robin Hood in the story last week of punters who queued at ATMs to withdraw money they didn’t have when the Bank of Ireland suffered a technical glitch. It was as though a whole lot of slot machines had suddenly started spewing out winnings to folk badly in need of a financial transfusion.
The story gives me the same kind of feelings that Robin the heroic outlaw aroused. If anyone deserve the Robin Hood treatment it’s the banks.
Now I know that two wrongs don’t make a right but the banks have effectively been robbing their customers and treating them unjustly. Back in the day I used to think bankers were kindly types, there to mind your money, pay you interest on it or lend you funds if you needed them. But they haven’t been doing that – not in the way they should, quite aside from the fact that they brought this country to its knees in the financial crash a decade and a half ago.
What they should do is to take in savings and deposits and then lend that money out to others as credit to make our own green bit of the world go round. The savers should get interest and the borrowers should be charged interest at a higher rate and the difference between the two is where the banks make their profits.
Lots of profits, last year the Bank of Ireland had profits of €1.1b. Half way through this year they have already made a €1.2b. pre-tax profit, a 192% increase. The banks here charge the highest interest rates on mortgages in Europe. And let’s not forget that BOI were fined €100m. by the Central Bank for the way they treated people with tracker mortgages..
The banks haven’t been doing things as they should. They aren’t giving interest or virtually none to savers and depositors although the interest rate set by the European Central Bank ECB has risen from 0 % 13 months ago to 4.5% and have been trousering interest which should have been passed on to savers. They are reported to have passed on only a 7.% fraction of this although they haven’t passed on the full interest hike to mortgage holders yet. One estimate suggests that savers are currently being cheated of around €120m. a month. The so called pillar banks (we now have only two main banks BOI and AIB) are to be called before an Oireachtas Committee this month and are being pressurised by Minister for Finance Michael McGrath to increase rates to savers in Government-backed schemes.
They should be lending to help the economy, but they are being miserly with what is, in effect, our money and Ireland ranks alongside undeveloped countries at 90th in the world for domestic credit, according to the Global Innovation Index. The banks were lending just over a quarter of national income in 2021, leaving small business, in particular, starved of credit and putting the brakes on all kinds of enterprises like small building companies and look what that feeds into – the housing crisis.
So, yes it wasn’t right of the ATM raiders to do what they did, but no I don’t have any sympathy for banks, our current Sheriff of Nottingham, who are morally in the wrong and appear to have learned nothing from their bail-out at our expense 15 years ago.
Why wait for the Government to call them to heel? Why not if you are a saver call in to your branch, and ask about interest you may be due and enquire too about having it backdated.
Morality and business don’t always co-habit.