Irish central bank persuading banks to cut rate

DUBLIN: Ireland's finance minister expects the central bank to use its "considerable" powers of persuasion to convince lenders to pass on the recent European Central Bank rate cut to mortgage holders.

While the government last week offered to provide the central bank with new powers to force Bank of Ireland and Ulster Bank to pass on the ECB's 0.25 percentage point rate cut, the bank's deputy governor said he did not need new powers.

"The deputy governor of the bank Matthew Elderfield also has an approach. He says at the moment he prefers to use the powers he has, together with his powers of persuasion, which are considerable, to affect the interest rate," Michael Noonan told parliament.

"We hope both Bank of Ireland and Ulster Bank will do what their peers have done and pass on the interest rate," he said.