Donohoe meets bank chiefs amid outrage over tracker scandal

Mood hardens in Government circles in favour of sanctions against lenders

Speaking outside the Department of Finance, Phillip Lane, Governor of the Central Bank of Ireland, said that the majority of bank customers affected by the tracker mortgage scandal, will be compensated by Christmas. Video: Fiach Kelly

 

Minister for Finance Paschal Donohoe will today demand a clear timetable for the repayment and compensation of people wrongfully deprived of tracker mortgages when he meets the chief executives and chairmen of Bank of Ireland, KBC Bank and Permanent TSB.

In the face of mounting public anger, the Cabinet will meet this evening at Government Buildings when Mr Donohoe will brief Ministers.

Meetings with the other banks will take place later this week.

Ministers have expressed impatience with the banks over the tracker scandal.

Independent Alliance Minister Finian McGrath said he expected to see a “clear plan for the banks about how they’ll deal with it.

“It needs to be a time-limited commitment. We expect it to be done and dusted by Christmas”.

Mr McGrath said the Government would consider stronger regulation of the banks, more powers for the Central Bank and an increase in the bank levy.

“We’ve been talking for too long,” he said. “Paschal [Donohoe] should say they have to act. And they should do it.”

‘Radical options’

A Fine Gael Minister said that Ministers had discussed “radical options” including seeking the removal of bank chief executives.

Sources close to Taoiseach Leo Varadkar’s office said a new generation of politicians needed to show it would deal with the banks differently.

Junior Minister at the Department of Finance Michael Darcy said the Government would consider removing consumer protection responsibilities from the Central Bank and establishing an independent agency.

Speaking at the Fine Gael presidential dinner on Saturday, Mr Varadkar said he was “very frustrated at the lack of progress, and we are certainly not ruling out further regulation, further sanction or additional taxation on the banks”.

Sufficient progress

Asked when the Government would take action, Mr Varadkar said he would not put a timeline on it but insisted there should be sufficient progress made by the end of the year.

However, Ministers suggested the Government’s line was hardening about the sort of sanctions that could be applied to the banks.

Junior Minister Seán Kyne said emergency legislation to facilitate fines should be prepared immediately and rushed through the Dáil before Christmas if needed.

A spokesman for the Department of Finance said Mr Donohoe wanted to “hear what the banks plan to do”.

It was expected the banks would provide a “definitive outline of what they intend to do” to correct and make redress for the tracker scandal, which has seen 13,000 mortgage-holders wrongly moved off their tracker mortgages to more expensive products.

Back-channel contacts between Government Buildings and financial institutions in recent days impressed the need to offer concrete responses to the tracker scandal.

Social Democrats co-leader Catherine Murphy said fines were not enough and that the law should be changed to make individual bank executives personally responsible for breaches of the law.

The Cabinet is meeting this evening, rather than in its usual Tuesday morning slot, because Mr Varadkar is travelling to Paris for talks with French president Emmanuel Macron.