Enda Kenny (Mayo, Fine Gael)

Unlike the Deputy's views over the years, when he was asked whether he condemned this or that, my answers are very straight. I said in here last week that if the regulator sought extra regulatory powers from the Government, the Government would respond to him. The regulator has written to me and has said at this time, he does not seek powers to regulate interest rates. The Deputy asks me what are we going to do about it. The fact is that the Government called in representatives of the three banks for a serious discussion, in advance of the interest rate reduction issue, about their strategy for growth and lending, their position on access to finance for small and medium enterprises, the capacity to meet targets set out by the two pillar banks of €3 billion each this year, and a number of issues that were of interest to the Government and to the banks. Following that, we discussed the question of the interest rate reduction being passed on.

I welcome the fact that Allied Irish Banks have passed on the reduction in interest rates. I am very disappointed that others have not done so. As has been pointed out clearly by the Minister for Finance, the ECB reduced interest rates to stimulate economic activity, to provide an opportunity for further investment, to help people who are in difficulty and not to have banks make a capital increase from it. This is ECB policy and I expected that banks would follow ECB policy.

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