Oireachtas Joint and Select Committees

Tuesday, 15 December 2020

Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach

Banking Issues in Ireland: Central Bank

Photo of Peadar TóibínPeadar Tóibín (Meath West, Aontú)
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In other words, if one were to design a banking market, it would not at all be our banking market. Our banking market shows enormous supplier power. The banks exert far more power than they normally would if there were healthier competition within the market. We have two pillar banks, in the words of the Government, and they have about 80% of the market. Instead of seeing that much increased competition, we are seeing one of the significant players probably leave the market over the next while. Is it not therefore a significant objective of the Central Bank, given its responsibilities to consumers, and a significant objective of the Government to see a radical transition from this overly concentrated market - dangerously concentrated, in my view - to a functioning competitive market over the coming years? For example, banks have enormous power over interest rates. Ireland has either the highest or the second highest mortgage interest rate in the European Union. I understand that the banking difficulties we have had play a part in this, but the banking structure also plays a radical part in it. There is no doubt that if there were tighter competition, it would chase those interest rates down somewhat. Consider even the way the banks interact with customers. The banks can determine most elements of the engagement with customers because they have this enormous supplier power. The locations of banks and the banks' closing down of their units in smaller provincial towns and throughout the country have an enormous effect on enterprise, families, etc. Is it not a very negative element of the banking industry that it is so concentrated?