Analysis: Bank charges have become a vexed question for the Republic's financial institutions over the last decade, not least because many of them have been caught illegally overcharging their customers.

But a report published by consultants Capgemini yesterday shows that retail transaction charges here - as opposed to loan interest - are amongst the lowest of 20 countries.

On average, it shows that for 19 frequently used transactions, covering everything from cash withdrawals to stopping cheques, the average Irish consumer pays €59 a year, compared with a global average of €108. The Republic's banks are also far cheaper than their euro-zone counterparts, who hit their customers for an average of €130 a year in fees.

From consumers' point of view, this means that the banks have not tended to compete for custom by trying to offer cheaper transaction charges than their rivals. The survey only deals with what banks charge consumers for each transaction. It does not deal with the cost of providing the services and thus does not tell us how much profit those charges earn for the banks, or whether or not there might be room for them to charge even less.

And, according to the Irish Bankers' Federation (IBF), there does appear to be some room for further cuts. Earlier this year, its member banks (the main institutions in the State) introduced a code of practice that made it easier for current account users to switch banks.

Since then, close to 10,000 people have changed their banks. IBF general secretary, Pat Farrell, says that since the code was introduced, some banks have begun to cut charges in an effort to draw business from their rivals. This indicates that at least some banks can afford to cut at least some charges.

There is another key influence on bank charges. The financial regulator has to approve individual increases. Once this happens, the banks can charge what they want, which means that it is at least a semi-regulated market.

In a report on the issue the Competition Authority called for this requirement to be abolished, as it hindered competition in the sector. Davy Stockbroker analyst, Scott Rankin, points out that it keeps charges low, to the point where it can cost banks money to provide services like current accounts.

However, they claw this back through charging higher interest rates on on some forms of credit than would otherwise be necessary.