ITALY So you think Irish banks behave badly when it comes to passing on the European Central Bank (ECB) interest rate cuts, do you? According to Mr Elio Lanutti of the Italian consumer association, ADUSBEF, Irish consumers can count themselves lucky.

His association has calculated that, even though the ECB cut interest rates from 4.5 per cent to 2.5 per cent between May 2001 and March 2003, the "prime rate" declared by ABI (Association of Italian Banks) remained almost unchanged throughout that period, currently registering 7.357 per cent or 4.875 percentage points higher than ECB rates.

Specifically in relation to mortgages, ADUSBEF reckons that it can take anything from one to three months before the larger banks deign to pass on the effect of the ECB's interest rate cut.

A spokesperson for Turin-based nationwide bank San Paolo Imi also argued that it was mistaken to link mortgage rates directly to the ECB's rates since the "parameters for mortgages" were very different from those for "prime rate" lending.

Dr Lanutti of ADUSBEF argues that this is just nonsense and, put simply, is merely a way of hiding the fact that Italian banks systematically short-change clients by, on the one hand, being lightning quick when it comes to reducing interest rates on bank savings, while, on the other, being rather slow when it comes to reducing the same rates on mortgage loans.

ADUSBEF and other associations believe that part of the problem lies in the fact that overall control of the Italian banking system is delegated to the central bank, the Banca d'Italia.

The consumer associations believe the Banca d'Italia turns a blind eye to abuses in the system, and is extremely reluctant to impose sanctions.

For its part, the Banca d'Italia denies this charge. A spokesman argued that it had an overseeing role but was de facto deprived of any meaningful sanctionary powers on issues like interest rates.

A spokesman for ABI pointed out that banks responded not to a regulatory body on interest rates (since there isn't one) but only to market forces.

The moral of the tale, says the man from ABI, is that the Italian consumer should get out there and shop around when it comes to looking for a mortgage.

When the shopper gets out there, he will discover that the major nationwide Italian banks are currently offering a €100,000 mortgage over 20 years at rates of 3.9-4.5 per cent (variable) or 6.0-6.5 per cent (fixed).