Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Minister for his reply. He is right to acknowledge that many bank employees have taken some pain and made sacrifices, and are concerned about what will be imposed on them by way of the cuts required as a result of the Mercer report. As he stated, the Government has decided that cuts of between 6% and 10% in total remuneration costs are required across the State-supported banks. I have some questions on that.

The Minister said he was not prescriptive in what he was asking the banks to do once they brought in savings within the band of 6% to 10%. Does that mean he is completely neutral as to how the banks achieve those savings? For example, if they proposed a flat rate cut from the CEO down to an ordinary bank official, would that be acceptable to him and the Department? Has he given the banks an indication that he would at least expect a sliding scale, whereby the greater impact of the reductions will be felt by those on the highest pay? Is he completely indifferent as to how they achieve the cuts?

What will become of the savings that will be achieved as a result of these decisions? He mentioned the need for banks to return to profitability, with which we all concur. It is essential. As the Minister knows, a commitment was given that the banks would be required to reduce their costs in order to forgo a 0.25% interest rate increase. Will the cost savings be used to accelerate the return to profitability? Will customers, in particular those on variable interest rates, enjoy a rate cut as a result?

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