Penny drops for the banks on forex issue

The banks spent months telling us they were all playing fair by the rules on foreign exchange commissions in the euro zone. Strange then to see how quick they have been to slash charges once the European Commission got involved.

Showing clearly that it had a better understanding of how financial institutions work, the Commission wasted little time being drawn into endless discussions about how the banks were/were not ripping off customers. They simply raided the banks and instigated examinations of practices that could well have proved costly to financial institutions still smarting in the aftermath of the DIRT inquiry.

It has not taken long for the penny to drop. Last month, Ulster Bank announced it was rewriting its charge structure and was dropped from the investigation. This week, Bank of Ireland and AIB did the same. It is a sound bet that the three Irish banks remaining under Commission oversight - National Irish Bank, Irish Permanent and ACC - will soon do the same.

It was no surprise that banks tried to find a way around the end of forex charges in the euro zone. What might bear renewed examination is the ruling by the Director of Consumer Affairs that their actions showed no signs of collusion to preserve a cartel.

dcoyle@irish-times.ie