Taoiseach: Negative interest on solicitor client accounts ‘seems punitive’
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Micheál Martin
Controversial plans to apply so-called negative interest rates to solicitor client accounts “seem punitive”, the Taoiseach has said.
The Law Society of Ireland has been campaigning since February against plans by Bank of Ireland and AIB to include solicitor client accounts among those which they are subjecting to negative interest rates.
The European Central Bank (ECB) has embraced negative interest rates as a means of encouraging spending amid the economic fallout of the Covid-19 pandemic.
Negative interest is currently only charged by Bank of Ireland on balances of over €2.5 million and by AIB on balances of over €3 million – but both banks intend to reduce that threshold to €1 million this year.
AIB has set the interest rate above the threshold at -0.5 per cent while Bank of Ireland has set the rate to -0.65 per cent.
Colm Burke, the Fine Gael TD for Cork North-Central, said in the Dáil yesterday: “If one is dealing with three or four transactions at any one time, there will be well over €1 million in an account.
“They are now going to be penalised and this is going to be added to the cost of house purchases in the long term.”
Mr Martin said the “rates seem punitive” and said he would “certainly engage with the minister for finance on that point”.
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