The European Commission's decision to investigate bank charges in the euro zone may eventually force banks to lower their rates throughout Europe.

Nobody expects any immediate action and the level of charges in the Republic continues to provoke controversy.

However, a random survey by Irish Times European correspondents reveals that charges in many parts of the euro zone are often higher than in the Republic.

Because of a directive issued by the Director of Consumer Affairs, Ms Carmel Foley, forcing Irish banks to publish their rates, consumers here have at least the chance to shop around.

Most EU states have not imposed the same condition on their financial institutions.

Although it will not appease angry consumers, Irish rates are lower in some instances than those in France and Germany. For example, Germany's biggest bank, Deutsche Bank, charges a 3 per cent commission on all foreign exchange transactions.

Of course the Central Bank will buy euro zone currencies from the public for free, but will not sell currency in exchange for Irish pounds.

This interpretation of the Maastricht Treaty, which referred to the role of national central banks in handling the euro, has been heavily criticised, but the Central Bank has no intention of changing its policy.

People who have exchanged currencies at their Dame Street offices have encountered some strange responses. This reporter was told the service was only available to people from overseas while another man was told he would have to go to a commercial bank to exchange foreign currency.

It seems the Central Bank is not too anxious to be the market leaders in this area.

The obligation on banks to publish their charges should mean that rates come down as we head towards 2002 when euro notes and coins become a reality, Ms Foley said.

This has not happened so far. Ms Foley said the requirement for financial institutions to publish two sets of notices - before and after Christmas - would help bring rates down.

She said that when financial institutions saw the first notices they would react to what their competitors were offering and drop their charges when they published their second notice.

Not a single institution did this. In fact the second notices which appeared in newspapers included, for the first time, the charges levied by the foreign exchange bureaux which were on the whole more expensive than mainstream banks.

Ms Foley said in negotiations with her the banks "commercially justified" their charges and that was why she gave them approval under the Consumer Credit Act.

This means the deal cannot be undone, unless the European Commission intervenes and devises a mechanism to force rates to be lowered.

See Q&A below