"Simply a Bad Idea": Bank of Ireland's McMunn Breaks With FCA on Regulator Growth Duty

⦿ Executive Snapshot

What: The Deputy Governor of the Central Bank of Ireland, Mary-Elizabeth McMunn, rejected calls for a competitiveness mandate for financial regulators, labeling it a dangerous idea.
Who: Mary-Elizabeth McMunn, Central Bank of Ireland; FCA, AMF, European Commission.
Why it matters: The stance highlights a divergence between Ireland's regulatory approach and the growing trend among European regulators towards promoting competitiveness in the financial sector, raising concerns about financial stability.

McMunn stated, "I think adding a competitiveness mandate, even secondary, is simply a bad idea," warning it could blur regulatory mandates and threaten financial stability.
The number of payment and e-money institutions licensed in Ireland rose from 14 in 2016 to 58 in 2025, indicating significant growth despite regulatory frameworks.
Total assets in Irish-authorized investment funds climbed from €1.7 trillion to €5.3 trillion over the past decade, showcasing the sector's resilience.

The Central Bank of Ireland's position reflects historical lessons from the 2010 banking crash, where similar pro-sector mandates contributed to regulatory failures.
This debate occurs amid a broader trend in Europe where regulators, like the FCA and AMF, are advocating for mandates that balance competitiveness with regulatory oversight.

Immediate implications include potential friction between regulatory bodies in Europe as Ireland's approach may deter foreign investment or influence cross-border financial operations.
Long-term implications could lead to a more fragmented regulatory environment in Europe, affecting how financial institutions operate across borders.

A significant risk is the potential backlash from the EU and other member states advocating for competitiveness, which could isolate Ireland within the European financial landscape.
There is also the risk of regulatory capture, where the push for competitiveness could undermine the core objectives of financial stability and consumer protection.

Key upcoming milestones include the EU's review of prudential rules expected in December 2025, which may influence Ireland's regulatory stance.
Future developments that indicate the success or failure of McMunn's position will include changes in capital requirements across the EU and impacts on financial sector growth metrics in Ireland.