Central Bank of Ireland It provided new evidence that the country’s lending market operates with more diversity and competition than a narrow focus on traditional retail banks would suggest. Also Deputy Governor Mary-Elizabeth McMunn Speaking to the Banking and Payments Federation of Ireland, he stressed that strong capital and liquidity buffers are still essential and should not be relaxed in the pursuit of faster growth. credit growth or increased competitiveness.
of the bank researchThe report, titled “Beyond the Big Three: A Broader Look at Competition in the Irish Credit Market”, draws on comprehensive loan level records from the Central Credit Register covering term loan originations between 2019 and 2025.
Analysts examined not only the three major domestic banks but also nonbank lenders, foreign banks, and credit unions. The results are striking. When these additional providers are included, the overall market concentration as measured by the Herfindahl-Hirschman Index drops sharply from 0.38 to 0.19.
The index for new business loans roughly halves, while concentration in consumer loans and asset finance falls by almost 80 percent.
Only concentration among domestic banks remained stable or rose further, but the broader market became less concentrated over time. data It also demonstrates an integrated credit ecosystem rather than isolated silos.
Around a third of Irish firms and 40 per cent of SMEs routinely borrow from more than one category of lender.
Nonbank lenders and foreign banks together account for a meaningful slice of revenue. SME financing that offers lasting relationships that complement rather than replace bank financing.
Pricing models show that nonbanks tend to charge premiums in less standardized segments, such as commercial sectors. lendingis consistent with product specialization rather than uncontrolled market power.
These findings defeat arguments for lowering regulatory standards because of insufficient competition, McMunn told the audience. He noted that the banking sector’s strong capital and liquidity positions had served Ireland well in recent economic cycles.
Detailed examination lending volumes, bank profitability and international comparisons do not make a convincing case for reducing overall resilience requirements.
He argued that a strong capital base enables: banks Reliably supporting households and businesses in both favorable and difficult conditions; benefiting consumers, shareholders and the economy.
The Vice President also touched upon proposals to expand the Central Bank’s mandate to include clear competitiveness objectives.
Benefiting from the lessons of 2010 banking Crisis and the Honohan Report warned that the latest phenomenon, in which regulators are tasked with promoting competition as well as stability, contributes directly to regulatory failures and enormous societal costs.
IrelandHe observed that the financial sector has grown steadily over the last decade, indicating that sound regulations are not a hindrance to growth.
He concluded that central banks most effectively serve productivity and economic growth by fulfilling their core missions. financial stability and ensure consumer protection with clarity and efficiency.
Finally, McMunn reaffirmed: bankits commitment to eliminating unnecessary regulatory complexity.
A multi-year domestic simplification program is underway to improve efficiency across auditing, authorization processes and reporting while maintaining key safeguards.
research and policy statements signal A clear stance: Ireland’s lending market is more competitive and resilient than is often reflected, and the Central Bank aims to maintain high capital and supervision standards to maintain this strength over the long term.
