Victory for people power as AIB Reverse Closure of Cash Facilities, Yet Banking Crisis Persists – Tóibín
Responding to the decision by AIB to reverse the closure of cash services at 70 banks, Aontú leader, Meath West TD and Finance Committee member Peadar Tóibín has stated;
“We welcome the decision by AIB to reverse their decision to close cash services at 70 banks. However the crisis in banking will continue unless there is the provision of proper competition in the banking sector. There is a disastrous lack of competition within the banking market. It is the root cause of the continuing dysfunction in banking throughout the state. It has not happened by accident. FG created what they called a Pillar Banking System after the crash. FG’s plan was for the vast majority of the market to be serviced by only two banks - AIB and The Bank of Ireland. Their plan is coming to pass with disastrous consequences. The continuing concentration of the banking market into only two suppliers has created a duopoly. This gives these banks enormous supplier power. They can dictate all aspects of business with customers as there is little or no competition to attract disaffected customers. The two main banks can pick and choose what services to provide safe in the knowledge that customers have nowhere else to go”.
“The capital requirements in Ireland are also a factor is the disappearing competition in Ireland. These capital requirement are having a cyclical effect. They are needed to prevent a credit bubble. But this must be balanced with the continuous collapse of the Irish banking market. Also the capital requirements and higher risk in Ireland are leading to higher interest rates in Ireland. But they cant take the blame for all the difference. The lack of competition is also adding to higher interest rates. I have asked banks who have come before the Finance Committee what proportion of the differential between their interest rates and the EU interest rates do capital requirements and risk make up and what proportion of the differential is made up by the lack of competition in the market in Ireland. These questions have not been answered”.
"We in Aontú were one of the main political proponents of the Banking Review. We passed a number of motions at Dáil Committees seeking for a broad review that would include the development of a Public Banking System in Ireland that would help increase competition and thus prevent the excesses of the enormous supplier power that we are witnessing at the moment. This is key, there must be more competition for the sector to function in the interest of customers. These banks operate by the gift of a state license. In terms of this decision AIB have ignored the State Banking Review that they are meant to be part of. They provided no consultation for the decision with communities and businesses. They are making significant tax free profit. They have been bailed out by the citizens and AIB is part owned by the citizens. KBC & Ulster bank are leaving market and now we have only 2 1/2 banks left. Unless the government get to grips with the reducing market and increased competition this process will continue." Tóibín concluded