Mr McCreevy said: 'I would like to see a significant proportion of this (tax saving) being passed on to customers. If you do, I will look at the vexed question of stamp duty on transactions.' He added that banks should start paying more attention to customer relations, urging them to 'look again at the way you handle branch closures and complaints from customers. It is crucial that the level of trust between the banks, their customers and society generally be a strong one.'

However, Martin Wilson, President of the Irish Institute of Bankers and also chief executive of Ulster Bank, made it clear that he objected to the Finance Minister's plea to pass on corporate tax savings to customers and the proposals in this regard contained in the recent strategic review of the future of Irish banking. The report in question recommends that the banks should use tax savings to make electronic or automated banking transactions more attractive to a wider range of customers, while maintaining appropriate charges for paper-based transactions. It proposes that the Department of Finance should review the taxation arrangements for payment mechanisms, with a view to rewarding the move to a more efficient electronic system without reducing the overall yield.

Mr Wilson commented: 'It will come as no surprise to you that I take issue with these particular recommendations. It is worth noting that, in general, charges for electronic transactions are cheaper than for paper transactions as they currently stand.' He added that Mr McCreevy's suggestion that the benefits of lower taxes be passed on would be discriminatory if it only applied to banks and not every other company in Ireland. He continued: 'It also ignores the fact that we have already invested millions in the development of Internet banking, debit and credit card and other electronic payment mechanisms and are committed to further improvements in these areas as technology continues to develop.'

The offer of slashing stamp duty on bank duty must be a tempting carrot for the Irish banking sector, but at first sight it appears the banks might consider McCreevy's suggestion an unfair trade. More generally, the Finance Minister sees a lot of changes ahead for the industry, and not all are welcome. Following on from last year's report on regulatory issues, Mr McCreevy said he would be proceeding with a statutory ombudsman to replace the voluntary schemes the industry has operated; a restructuring of disciplinary procedures available to the regulator; and the setting up of panels to represent not only the industry but also the consumer. This will replace the existing banking ombudsman's system, which is voluntary. However, Mr McCreevy did not refer to the position of a single regulator for the financial services sector, on which a decision has been expected for months.