The Competition Authority has confirmed that it plans to conduct 'a study' into the banking industry in Ireland.
The terms of reference for the study, to be carried out by the director of the Authority's Regulated Markets, Ms Isolde Goggin have yet to be finalised.
Ms Goggin said this afternoon that the study will focus on "whether competition in the banking sector operated well for consumers and [businesses]".
The draft terms of reference will be available on the Authority's website www.tca.iewithin the next two weeks and interested parties will be invited to offer views and information before the terms of reference are finalised.
This study is one of a number of new studies currently being carried out by the Competition Authority. In deciding which studies to carry out the Authority has to take in account the importance of the sector for the economy, the existence of public or private barriers to entry and the public interest generally.
According to a statement issued by the Authority, "the application of these criteria to the banking sector suggests that it merits closer examination." The Irish Small and Medium Enterprise Association(ISME) said it "strongly endorsed" the decision and added that it was "encouraging . . .that positive action [was] now being undertaken."
"This is particularly good news for those small business customers who have for years been subjected to exploitation by the banks which has resulted in them paying excessive rates of interest on loans and overdrafts, excessive bank charges and unwarranted interest surcharges on overdrawn accounts," ISME Chief Executive Mr Mark Fielding said.
"Small businesses are easy pickings and do not enjoy the independence to shop around and compel the banks to compete for their business. They are therefore in the front line of the banks' abuse of their dominant position.
"This dominant position has been allowed to fester due to lack of competition in the Irish business-banking sector."
Mr Fielding also called for the provision of adequate resources for the CA in order pursue its inquiry.
"It is now imperative that the Competition Authority is provided with adequate resources and co-operation from the Government to ensure an in-depth 'no stone left unturned' investigation to expose once and for all the uncompetitive practices of the banks."