Are the banks robbing savers?

Time to get my accounts out of this country.

1) Why are they not passing on 100% of the increase to borrowers? It could put a lot of people over the edge in regard to their mortgage payments. This could lead to people defaulting on their mortgage and then the subsequent protracted process of eviction or restructuring of loans. If there ends up being a lot of evictions, that will flood the housing market and will devalue the property they have repossessed. It's also worth remembering that the cost of living has increased massively, and I assume they are trying to mitigate the risk of bad debts by not passing on 100% of the rate increases. The bank is also intrinsically tied to the economy... if people have no money to spend, the economy will tank and we'll be back to the late noughties again.

2) Why are they not passing on 100% of the increase to savers? Savings cost a bank money and the more that is saved with the bank, the more liquidity is needed, and they also need to ensure they have enough reserves. Banks make their money through interest from loans predominately, so their interest (no pun intended) is to side with their borrowers as they pay the bills and they really don't want them defaulting. It's also worth noting that if the ECB decided to start reversing the hikes, the banks could end up at a point like last year where savings were costing them money - hence the savings caps and so forth - It's all a delicate balancing act.

3) Are the banks robbing savers to shield borrowers. No, they are running a business and that means you have to prioritise your customers into those who make you money, those who don't make you money, and those who cost you money. Running a bank is expensive and it's highly regulated so they need to make sure they operate within the parameters that are required whilst ensuring they have enough profits to mitigate exposure to risk, because there is a lot of risk, especially in times like this.

Before people start jumping to conclusions, I don't work for a bank, nor do I have any interest or shares in any banks. I'm just pointing out that there is a lot more to it. We all know what happened when the last Irish bank failed, and we really don't need to see that again.

Wow. 6% is amazing.

Exactly. I find it odd that people with long-term savings are leaving them in banks and in many cases, effectively losing money. There are some investment funds that are offering good returns which would be a far better alternative.

But at the risk of variations in exchange rate.

Depends on the exchange rate and where it’s going though.

@ZookeeperDub I note you edited your post to include AIB/BOI operating in the UK.

Look at who came last in a 2023 survey

Banks are dying people, it will take a good few more years but then we will have decentralised finance fully functional and user friendly, no longer will we be at the mercy of the current financial monopolies, a mass transition to cryptocurrencies will occur within the next 3 years

I wouldnt go nuts if non paying customers were kicked out of their house and into social housing.

Oh wait....we dont have any available social housing.

I agree that we should remove non payers and reduce rates for payers as a repercussion.

But I dont see the state doing it when they know they have to house the non payers somewhere.

And they have nowhere.

Things wont change until we have a surplus of housing.

Which wont happen for decades.

The someone that may move into the house is already housed.

The govt are happy enough for workers to house share and not complain, or 30 somethings to live at home with their parents and not complain, but they dont want people that cant or wont houseshare being kicked out, displaced and ending up on the streets.

in other words, the status quo is better than the shake up.

I am not saying that is right by the way.

But it is the way the Govt look at it.

Path of least resistance and all that.