Calls for banking review to focus on consumers' needs

The chairman of the Oireachtas Committee on Finance has called for the debate on industry practices to remain focused on the needs of consumers.Deputy Seán Fleming of Fianna Fáil suggested that recent pronouncements made by various bodies may lead to some confusion in the public mind.

"I hope that they will not divert attention away from the big picture, which is to ensure that the consumer will enjoy real benefits from any examination of the sector," he said.

The Oireachtas Committee will conclude its review on September 4th, when it hears from representatives of building societies, credit unions and the Money Advice Bureau. The committee says it will make transcripts of these proceedings - as well as those from earlier proceedings in July - available to interested bodies.

Meanwhile, the debate between the Irish Small and Medium-sized Enterprise Association (ISME) and the Irish Banker's Federation (IBF) continues.

Yesterday, ISME issued an invitation to the banker's organisation to take part in a joint investigation of the banking sector. This comes just days after a study conducted by Compecon for ISME slammed practices in the industry.

Mr Mark Fielding, ISME's chief executive, criticised the IBF's reaction to the study - whose findings were presented last week - and accused the banker's organisation of being very quick to discredit criticisms from small and medium-sized businesses.

In the proposed joint study, ISME wants to investigate interest rates, bank charges, and switching processes and costs - all of which were criticised by Compecon. The business organisation describes the proposal as a "put up or shut up" challenge.

However, it is unlikely the IBF will take up ISME's invitation. When contacted by The Irish Times, the organisation said it was unwilling to comment on the issue of banking practices in Ireland any further until it has made its submission to the Competition Authority, which is examining competitiveness in the sector.

The banking sector has taken a bruising in the last week. Apart from the ISME reports, the industry was also severely criticized by Ms Carmel Foley, director of consumer affairs, who accused banks of making vast profits while at the same time claiming modest profitability.