The Central Bank of Ireland has provided new evidence that the country’s lending market operates with greater diversity and rivalry than a narrow focus on traditional retail banks would suggest. At the same time, Deputy Governor Mary-Elizabeth McMunn used a speech to the Banking and Payments Federation Ireland to stress that strong capital and liquidity buffers remain essential and should not be relaxed in pursuit of faster credit growth or improved competitiveness.
The Bank’s research, titled “Beyond the Big Three: A Broader View of Competition in the Irish Loan 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 largest domestic banks but also non-bank lenders, foreign banks and credit unions. The results are striking. When these additional providers are included, overall market concentration—measured by the Herfindahl-Hirschman Index—falls sharply from 0.38 to 0.19.
In new business lending the index is roughly halved, while concentration in consumer credit and asset finance drops by nearly 80 per cent.
Concentration among domestic banks alone has stayed stable or edged higher, yet the wider market has become less concentrated over time. The data also show an integrated credit ecosystem rather than isolated silos.
Roughly one-third of Irish firms, and 40 per cent of SMEs, routinely borrow from more than one category of lender.
Non-bank lenders and foreign banks together account for a meaningful slice of SME funding, offering persistent relationships that complement rather than merely substitute for bank finance.
Pricing patterns indicate that non-banks tend to charge premiums in less standardized segments such as commercial lending, consistent with product specialization rather than unchecked market power.
McMunn told the audience that these findings undercut arguments for lowering regulatory standards on the grounds of insufficient competition. She noted that the banking sector’s robust capital and liquidity positions have served Ireland well through recent economic cycles.
Detailed examination of lending volumes, bank profitability, and international benchmarks yields no persuasive case for reducing overall resilience requirements.
A strong capital base, she argued, enables banks to support households and businesses reliably in both favorable and difficult conditions—delivering benefits to consumers, shareholders, and the economy.
The Deputy Governor also addressed proposals to expand the Central Bank’s mandate to include explicit competitiveness objectives.
Drawing on the lessons of the 2010 banking crisis and the Honohan Report, she warned that the last occasion when regulators were tasked with promoting competition alongside stability contributed directly to regulatory failures and enormous societal costs.
Ireland’s financial sector has expanded steadily over the past decade, she observed, demonstrating that sound regulation has not acted as a barrier to growth.
Central banks serve productivity and economic expansion most effectively, she concluded, by carrying out their core mandates of financial stability and consumer protection with clarity and efficiency.
Finally, McMunn reaffirmed the bank’s commitment to cutting unnecessary regulatory complexity.
A multi-year domestic simplification program is under way to improve efficiency across supervision, authorization processes and reporting, while preserving essential safeguards.
The research and policy remarks signal a clear stance: Ireland’s lending market is more competitive and resilient than often portrayed, and the Central Bank intends to maintain high standards of capital and oversight to protect that strength for the long term.