Ireland's effective duopoly in banking, with AIB and Bank of Ireland sharing about three-quarters of the market, could inhibit investment in the IFSC, according to the author of a report on Dublin's competitive position among global financial centres.

Professor Michael Mainelli, founder of the Z/Yen think tank, which compiles the semi-annual Global Financial Centres Index (GFCI), said his research points to a sentiment in the international financial industry that having just two big banks is a big negative for decision-makers.

"It's difficult to attract new banking business into a duopolistic environment," he said. "The more your see a richer environment for banking, the more your think it's a fair environment."

The findings call into question the government's commitment to propping up the big two banks and seeking the consolidation of smaller players. Mainelli said this could have a negative impact on the development of the IFSC.