In all the debate around Nama, one key element has been largely ignored amid all the arguing about discounts and risk-sharing: the consequences for foreign-owned banks in Ireland. Various political and competitive pressures are combining to make business very difficult for these institutions, and Nama looks as if it might only make things harder as it strengthens the domestic competition, possibly to the detriment of the outsiders.

So far the Nama discussion has primarily revolved around the banks and building societies covered by the government guarantee scheme: AIB, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, EBS and Irish Nationwide. This makes sense. After all, the taxpayer last year "agreed", in a moment of intense crisis, to guarantee more than €400bn in liabilities – deposits and bonds – those institutions depend on to remain open. Naturally, commentators should be most concerned with how Nama will address the risks in the banking system and ease Ireland's economic difficulties.

But the foreign-owned banks – which include long-established players such as Ulster Bank and National Irish Bank – are a big part of the picture, even if their particular problems are being dealt with by the governments of the UK and Denmark (to mention just two). Taken as a group, foreign-owned banks contribute one-third of total lending in Ireland, or about €126bn.

To put that figure in perspective, foreign banks have lent about 40% more than the €90bn Nama is expected to take on in eligible loan assets from the Irish banks. If a large part of our economy depends on Nama working out, an even larger part depends on the credit provided by non-domestic lenders.

Two things are happening to disrupt foreign banks' contribution to the economy. The banks themselves are being pulled back to their home markets and they are also, because of Nama, being competitively squeezed out of Ireland.

There has been a widespread nationalisation of banking as governments, which are underwriting their banks, demand a certain quid pro quo for taxpayer support. Just as there are justified calls in Ireland for the guaranteed banks to put their funding to use by lending into the economy, every other country with basket-case banks wants the same thing. That means the likes of Ulster and Bank of Scotland Ireland – the two biggest foreign banks here – have pulled back their lending. In fact, both are virtually absent from the mortgage market and much less visible in business banking than they were pre-crisis. Ulster and BOSI are owned by RBS and Lloyds, respectively – two institutions that have had to lean heavily on support provided by the British treasury.

Rabobank's Irish subsidiary, ACC Bank, which is trying to recover €136m in unpaid property loans from developer Liam Carroll by winding up his company, Zoe Developments, has signalled that it is considering leaving Ireland. Belgian bank KBC remains committed to the market here, but has temporarily pulled back, as has Danske-owned NIB, which has already shipped considerable losses in the past year.

These changes are not just due to the fragmentation of the EU's single market into separate national ones, though. As Bloxham Stockbrokers pointed out in its latest banking report, 'Crossing the Rubicon', the average loan-to-deposit ratio for foreign banks in Ireland is approaching 300%. That means they have lent €3 for every €1 they have on deposit. The rest they funded in the wholesale markets, which are not nearly as accessible as they once were. To get back down to a more sustainable 125%, Bloxham calculates the foreign banks will have to pull about €71bn in lending out of Ireland.

As luck would have it, Nama should replace a great deal of that lost lending when it trades government bonds for the loan assets on the banks' balance sheets. According to reliable indications from sources about the Nama discount, the government will issue just shy of €60bn in bonds, which can then be used for liquidity purposes by the banks and, presumably, turned into new lending. This new lending (the thinking goes) will be a source of earnings for the banks, allowing them to generate new capital on an ongoing basis, and minimising their reliance on government.

But the foreign-owned banks get a raw deal out of Nama. Not only are they under pressure from their home governments to commit less to Ireland – precisely when lending unsupported by deposits and high loan loss provisioning has forced them to commit more – but their local franchises will be left competing with Irish banks that have much cleaner balance sheets and piles of new money to lend. The foreign banks will have neither. It's no wonder they are considering their commitment to Ireland.

BOSI is now in an ongoing strategic review process that may yet result in the closing of its Halifax retail arm. Ulster has already incorporated First Active, closing numerous branches, and is looking for 1,000 redundancies. As the third-biggest full-service bank in the market, though, it probably has too much to lose by pulling out. The fate of the smaller players, apart from ACC, is still unclear.

However, the EU has taken particular notice of this problem. According to industry sources, the EU has become concerned that banks receiving state aid, such as RBS (Ulster) and Lloyds (BOSI), are considering restructuring in ways that upset competition within the single market in favour of their home markets. BOSI parent Lloyds, in particular, is understood to have come under pressure to back off from some of its more radical divestment and disposal plans, which could include its Irish operations.

How the government and the Irish banks respond to the EU's developing strategy in this regard will shape the banking landscape – and available lending sources – for years to come. Finance minister Brian Lenihan is expected to announce a comprehensive plan for consolidations in the sector. A marriage of foreign and domestic just might solve a few problems.