Concerns raised over ‘banking duopoly’

CONCERNS about the long-term viability of a two-pillar model for the Irish banking system have been expressed by European competition commissioner Joaquin Almunia, who believes it might not represent a stable competitive proposition.

Speaking at the annual lunch of the Federation of International Banks in Ireland (FIBI) in Dublin, yesterday, Mr Almunia said the prospect of a de-facto duopoly of AIB and Bank of Ireland-led banking groups is understandable in the short-term, but “will require close surveillance, because duopoly may hamper competition in Ireland’s banking market”.

“Looking forward, to the medium-term, this can’t be a stable position. I will react if the two pillar system is seen to increase barriers of entry to the Irish banking market and to cause problems for competitiveness,” Mr Almunia added.