The decision by AIB to pass on this week's interest rate reduction to mortgage holders after all, is a very welcome development.
Yesterday's announcement by the bank that it was refusing to pass on the cut, was an affront to the people of Ireland, to whom AIB owes its very existence, and I criticised the bank at the time describing its attitude as showing shocking indifference to the difficulties facing its customers.
Today in the Dáil, the Govt, and Labour Leader Eamon Gilmore in particular, were accused of being impotent in the face of the bank's intransigence. Tonight it is clear that the Govt's approach to this has been spot on, and the pressure that the Tánaiste and Taoiseach put on the banks, directly at their meeting yesterday, and indirectly in the following 36 hours, has paid off handsomely. While the opposition were jumping up and down in the Dáil and in the media, the Govt was actually doing something about this problem and has ended up getting a great result for thousands of familes around the country.
Passing on this rate cut will alleviate some of the pressure on borrowers whose taxes bailed out AIB in the first place and may also mean that fewer households will find themselves facing the prospect of running into mortgage arrears problems.
It was about time that somebody put manners on banks like AIB, who gorged themselves on the property bubble, only to come running cap in hand to the Irish people when the bubble burst.
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