Banks May Prove Biggest Losers in Latest Irish Political Fight
- Irish Parliament debates giving central bank new powers
- Bank shares drop amid concern about new political pressure
Pedestrians pass the Bank of Ireland offices in Dublin, Ireland.
Photographer: Crispin Rodwell/BloombergIn a battle for political supremacy in Ireland, the independence of the country’s banks may prove to be the first victim.
Prime Minister Enda Kenny’s minority government relies on the support of the largest opposition party, Fianna Fail, to stay in power. Flexing its muscles for the first time under the new arrangement, Fianna Fail is pushing the government to force banks to reduce interest rates for 300,000 customers. Since the plans were first mooted, shares in Permanent TSB Group Holdings Plc, the lender most exposed to falling rates, have dropped about 30 percent. Facing almost certain defeat, the government opted not to oppose the proposals as they moved through parliament late Wednesday.