An investigation published by the Competition Authority has concluded that the Irish banking system is not working well for personal customers or businesses, and is not competitive in key areas.
It also says that AIB and Bank of Ireland control 70% of the market for personal current accounts.
It describes this situation as highly concentrated and says there is little competition on interest rates for current accounts.
The 13-month investigation was carried out by independent economic consultants on behalf of the authority, which said it agreed with the recommendations and would probably add some more of its own.
It also found that smaller companies have lost out to the tune of €85 million a year because of a failure to pass on sufficient interest rate cuts.
The report makes 40 recommendations to improve competition in Irish banking for the benefit of customers.
It blames the lack of competition on 'structural arrangements' within the banking sector, the behaviour of the banks and Government regulation.
