⦿ 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.

⦿ Key Developments

• 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.

⦿ Strategic Context

• 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.

⦿ Strategic Implications

• 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.

⦿ Risks & Constraints

• 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.

⦿ Watchlist / Forward Signals

• 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.