The Central Bank of Ireland's deputy governor for financial regulation pushed back hard against calls to give regulators a mandate to promote the competitiveness of the financial sector, calling the idea "simply a bad idea" and warning it risks repeating the policy errors that contributed to Ireland's banking crash.

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Irish Central Bank Rejects Calls for Regulator Competitiveness Mandate

Mary-Elizabeth McMunn, speaking yesterday (Wednesday) at a Banking and Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term Federation Ireland event in Dublin, used the address to set out the regulator's position on three issues she said currently dominate the European debate: capital requirements, competition, and complexity.

The remarks land at a moment when several major regulators are moving in the opposite direction, with the UK's Financial Conduct Authority, France's AMF, and the European Commission's simplification agenda all leaning into the language of competitiveness and growth.

Regulator Rejects Competitiveness Objective

McMunn's most pointed comments targeted proposals, both at EU level and domestically, to give financial regulators a competitiveness mandate similar to the one the FCA received in 2023 under the Financial Services and Markets Act.

"I think adding a competitiveness mandate, even secondary, is simply a bad idea," she said, adding that it was "not clear" how the proposal related to simplification "as opposed to deregulation." Such a mandate would "blur our mandate at best," she said, "and at worst risks having a corrosive effect on decision-making leading to financial stability issues."

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The reference to the Irish banking crash was explicit. McMunn cited the 2010 Honohan report on the country's regulatory failures, noting that a similar pro-sector mandate "contributed so significantly to the failings of that period."

Ireland's Stance Cuts Against the EU Trend

McMunn's position puts the Central Bank of Ireland at odds with a string of European peers. AMF Chair Marie-Anne Barbat-Layani told the European Commission in September that the EU's fragmented supervisory model "hinders competitiveness," calling for expanded ESMA powers over cross-border firms.

The FCA, meanwhile, has built its post-Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term reform program around an explicit secondary objective on growth and international competitiveness, including a 12-month overhaul of UK bond and derivatives transparency rules pitched as competitiveness-driven.

The split also reaches outside Europe. On the same day McMunn spoke in Dublin, outgoing Australian Securities and Investments Commission Chairman Joe Longo defended his enforcement-led tenure in a final speech, arguing watchdogs "need to both bark and bite."

Read alongside McMunn's remarks, the two speeches frame a widening transatlantic and trans-hemispheric debate over how forcefully regulators should weigh sector growth against enforcement and stability.

McMunn argued the data does not support the case for relaxation. Euro area bank credit growth currently runs around 3% and Irish credit growth above 6%, she said, with banks holding capital headroom of roughly 480 basis points in the EU and 620 basis points in Ireland above regulatory minimums.

"Lowering capital requirements is a solution in search of a problem," she said.

Ireland's Fintech and Payments Sector Doubles in Size

McMunn used the speech to disclose fresh growth figures for Ireland's wider financial sector, which she deployed as evidence the country is "not unable to compete" despite its regulatory regime.

The number of payment and e-money institutions licensed in Ireland rose from 14 in 2016 to 58 in 2025, with safeguarded client funds approaching €12 billion, a roughly 15-fold increase. Trading venues went from 2 to 5.

The number of complex trading firms tripled to 10, with sector assets up more than 600%. Total assets in Irish-authorized investment funds climbed from €1.7 trillion to €5.3 trillion over the decade.

The Central Bank also flagged 2025 as the year Ireland authorized its first new retail bank "in some time," with McMunn pointing to a continuing authorization pipeline. International financial services employment in Ireland has roughly doubled since 2015 to over 60,000.

Capital Debate Heats Up Ahead of EU Review

The speech doubles as a marker for the next round of EU prudential rule-making. McMunn referenced a December 2025 statement in which Eurosystem central bankers said any changes to the EU prudential framework "must sustain current levels of resilience," a line designed to head off industry pressure for capital reductions.

Comparisons with the United States, often cited by advocates for lower European capital, do not stand up, she said, citing recent ECB research showing US large banks face higher capital requirements than European peers.

The Basel III implementation in Europe already cut capital requirements for some banks, including a 6% reduction for Irish lenders.

McMunn closed with a warning aimed at the broader simplification debate now running through Brussels and London. Regulation needed to adapt to a more complex world, she said, but "we cannot simplify so much that we do not capture complex risks."