ESRI wants swifter State banking sector exit

A quicker-than-planned dilution of State involvement in the banks is needed in order to boost competition in the banking sector and help usher in lower lending rates to consumers, a leading economic think-tank has said.

The Economic and Social Research Institute (ESRI) has said continued State involvement in the banking sector – via stakeholdings in the banks and strengthened regulatory powers for the Central Bank – is acting as a disincentive to outside credit institutions and that more players will be needed as the mortgage market grows in the coming years.

“Recent legislation proposing to give the Central Bank powers to regulate variable interest rates may act as a further disincentive to new competition entering the Irish market.