This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
OK
#Open journalism No news is bad news

Your contributions will help us continue to deliver the stories that are important to you

Support The Journal
Dublin: 15 °C Monday 3 August, 2020
Advertisement

ESRI: Ireland needs tougher financial regulation

The think-tank says that consumers are paying too much for financial products and taking on too much risk.

Image: The Canadian Press/Boris Spremo

TOUGHER FINANCIAL REGULATION is needed to protect consumers when they deal with banks and other financial institutions, according to new research from the ESRI.

In a study of more than 80 cases of how people make financial decisions, the think-tank found that systematic biases in financial reasoning can result in consumers paying too much for financial products and taking on too much debt.

The think-tank found that most consumers lack the knowledge needed to choose the best deals from among the many mortgages, credit cards and other financial products on offer.

Even consumers with better financial understanding are prone to taking on too much debt or paying too much in bank fees, the study found.

Financial institutions can exploit people’s difficulties in understanding financial products, and information campaigns only make modest improvements in how consumers make their decisions.

The research suggests tougher inspection, bigger punishments, and publicising violations in order to force financial institutions to act in consumers’ interest.

#Open journalism No news is bad news Support The Journal

Your contributions will help us continue to deliver the stories that are important to you

Support us now

Dr Pete Lunn, the author of the report said:

In the wake of the financial crisis many countries have recognised the need to strengthen protection for consumers of financial services and have begun to introduce new rules. The evidence shows that we need tougher regulation of the financial sector – to have rules that force companies to act more in consumers’ interest.

ESRI: Austerity is working – and there are few other alternatives >

MEPS vote to make further cuts to roaming charges >

  • Share on Facebook
  • Email this article
  •  

About the author:

Christine Bohan

Read next:

COMMENTS (11)