The Irish banking sector was accused today of effectively running a cartel and engaging in anti-competitive practices.
The Office of the Director of Consumer Affairs is due to publish its submission to the Competition Authority's report on the Irish banking sector later today.In the report, the ODCA accuses the main banks were "operating like a club" and restricting public choice.
It criticises the fact that the retail payments and clearing system in Ireland is owned and operated by the banking industry. This means that any financial institution trying to break into the Irish market are effectively locked out, the report notes.
This is "a serious block to competition" and a cause for "serious concern".
"This would not be accepted in other sectors of the economy," the director of consumer affairs, Ms Carmel Foley, said this morning.
"I am delighted there is a spotlight on the practices in the system here. It is in the interests of the consumer".
Yesterday, the Irish Small and Medium-sized Enterprise Association (ISME) released details of a study showing what it called a "serious lack of competition in the banking market".
ISME claimed that Irish banks were overcharging their customers compared to other European countries in terms of interest margins and fees.
The study found that Irish SMEs are being charged an average of 8.9 per cent interest on credit. The association said figures compiled by the EU Commission's statistics body, Eurostat, showed the European average was 4 to 6 per cent.
However, the Irish Bankers' Federation discredited this pan-European comparison, saying Europe's central banks had said the statistics were not suitable for making cross-border comparisons.