Interest Rates on Loans Increase

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This past week has seen the commercial banks in Cyprus set to increase interest rates on loans.
 
The interest rate increase has caused outrage from consumers who were hoping for a decrease as the European Central Bank has just slashed its base rate to 3.25%. There has been a slight relief as banks have postponed the increases until the end of the year.
 
The banks have defended their actions saying the increase is a neccessary measure in order to ensure the banking system in Cyprus remains stable and competitive. The newly established Greek banks in Cyprus have recently been luring in customers with high deposit rates and this has assisted in a banking price war.
 
Some might say that in the present world financial situation, interest rates should be decreased and not increased.