Central Bank publishes research on the Irish lending market and reinforces importance of capital and resilience

• Central Bank loan-level research shows the Irish lending market is significantly less concentrated when considering the full diversity of lenders.
• Robust capital and liquidity positions have served the sector well – with the evidence not supporting a lowering of overall levels of resilience on the basis of bank credit, profitability or international competitiveness.
• Central Banks best serve these broader objectives related to productivity and growth by delivering on their core mandates, effectively and efficiently.
  

Speaking at the Banking and Payments Federation today (Thursday 7 May 2026) Deputy Governor Mary Elizabeth McMunn set out the Central Bank’s position across three key issues — capital, competition, and complexity - and discussed new research into the lending landscape in Ireland which was also published today.

The Deputy Governor spoke of the importance of capital requirements and a safe and sound banking sector, and how, looking at the data, there is little evidence to support calls to reduce bank capital requirements on the basis of boosting lending and competitiveness.

Deputy Governor McMunn said: “Keeping the sector strong and resilient is not about resilience for resilience’s sake — but so banks can continue to perform their important functions, through good times and bad. A resilient, well-capitalised banking sector is not just good for consumers: it is good for banks, good for their investors, and good for the economy.”

The Central Bank today published new research “Beyond the Big Three: A Broader View of Competition in the Irish Loan Market (PDF 1.9MB)” drawing on granular loan-level data from the Central Credit Register — the most comprehensive analysis yet of competition in the Irish loan market.

The research found that when non-bank lenders, foreign banks, and credit unions are included alongside domestic retail banks, new business lending is 60% less concentrated and concentration in consumer credit falls by more than 80%. Crucially, one-third of Irish firms including 40% of SMEs  borrow from multiple lender types, indicating an active and competitive ecosystem rather than a captive market.

The research found that when non-bank lenders, foreign banks, and credit unions are included alongside domestic retail banks, new business lending is 50% less concentrated and concentration in consumer credit falls by around 80%. Crucially, one-third of Irish firms including 40% of SMEs  borrow from multiple lender types, indicating an active and diverse  ecosystem.

On proposals to give the Central Bank a competitiveness mandate, the Deputy Governor was unequivocal. Invoking the Honohan Report’s findings on the causes of Ireland’s banking crisis, she warned that the last time the regulator carried such a mandate it contributed directly to the failures that imposed enormous economic and societal costs on the country. Ireland’s financial sector has grown strongly over the past decade — evidence that regulation is not a barrier to growth. Central Banks best serve the economy by delivering on their core objectives, effectively and efficiently.

Deputy Governor McMunn said “ The last time the regulator had such a mandate it did not end well — it was not in the interests of the public, the economy, or the country, and in the long run was certainly not in the interest of the sector itself”.”

Reaffirming the Central Bank’s commitment to reducing regulatory complexity, the Deputy Governor continued:

“Regulators should, however, be open to challenge, accountability and to review – and we should listen and we should engage. This is why we are serious about the simplification, and have set out a comprehensive multi-year domestic simplification programme to deliver further efficiencies and effectiveness across regulation, supervision, gatekeeping and reporting.

– ENDS –