The Central Bank lost the argument on retaining its role as a single financial regulator almost before it began. The decision of the Finance Committee of the Dail last autumn to recommend a single authority for all financial regulation probably constituted the real nail in the Central Bank's coffin.

The bank was beset with criticism following the string of financial scandals including misselling at NIB, offshore accounts, DIRT payments at AIB, among others.

The bank has always argued that it could not be held directly responsible for many of these scandals and in that it is telling the truth.

But the problem is more that the bank never actively sought an extension of its powers to allow it to regulate the banks with the same degree of vigour as it did the investment intermediaries and institutions. It was also seen as excessively closed and almost beyond rebuke.

The bank does argue that there are fewer banks and that it knows the top management. But that degree of cosyness was anathaema to many on the Dail committee and on the advisory group subsequently set up by the Government to examine the issue of a single regulator.

It is undoubtedly true that the Central Bank has performed its regulatory functions very well. There has never been a banking collapse here and the Bank can point with pride to some of the potential scandals which it headed off at the pass.

But it was the apparent non-accountability and unwillingness to take on new roles which perhaps prompted the Dail Finance Committee to make its recommendation. The fact that there was no clear line of regulation for insurance brokers added to the argument. Responsibility for the latter involved a mixture of self-regulation and the Department of Enterprise, Trade and Employment.

In the end the bank would have liked to take on a supervisory role for insurance companies and intermediaries too. And it has been backed in this goal recently by an influential report from the OECD. But it now seems that the battle is lost.

The regulation of banks and insurance companies has traditionally been separate. But as bancassurers such as AIB's Ark Life and Bank of Ireland's Lifetime expand, the issue of single regulation comes more to the fore. And no EU central bank has control over both.

Key elements of the advisory group - chaired by former Progressive Democrat TD Mr Michael McDowell - felt that it would be undemocratic to invest so much power in any institution that was not accountable.

And of course, because of its monetary policy or interest rate-setting functions, the bank is legislatively independent of the executive.

It is understood that a compromise was on the table which would have left the bank with its ECB obligations and monetary policy on one side with the regulation ring-fenced in a separate part of the bank, directly accountable to the Dail. The governor of the Bank would have merely been the titular head of the regulatory side. However, it is thought that this was turned down by the bank.

MSF, the union representing most Central Bank staff, has also argued that regulation through the Central Bank would be cheaper. given the size of the Central Bank's reserves. However, it is understood that there is a move to have these managed by the National Treasury Management Agency once the new agency has been set up.