Makhlouf calls for action to unlock Irish retail investment potential
Gabriel Makhlouf, Governor of the Central Bank of Ireland, called for concerted action to address low retail investment at the inaugural Savings and Investment Forum on March 31, 2026. He emphasized the need to unlock capital market participation to fund European economic transitions.
Ireland's dormant capital
Governor Makhlouf highlighted that European households hold substantial savings, with euro area deposits nearing €10 trillion, yet only a fraction is invested directly in capital markets instruments.
He noted that Ireland's position is distinctive, with household wealth heavily concentrated in housing.
Crucially, approximately €170 billion sits idle in deposits in Irish banks.
This results in very limited Irish retail participation in financial markets, with households holding just 2.3 percent of financial assets in direct investments, significantly below the EU average of 7.5 percent.
Despite Ireland being a major global centre for investment funds with over €5 trillion in assets under management, direct holdings in investment funds are among the lowest in the EU at just above 2.2 percent.
Makhlouf stressed that strong capital markets are essential to complement the banking sector in financing innovation, infrastructure, and the digital and green transitions across Europe.
Three pillars for retail engagement
Makhlouf identified a complex interplay of historical, cultural, and structural factors contributing to Ireland's low direct retail participation.
Significant barriers persist, including deeply rooted psychological and emotional factors stemming from past economic crises.
Knowledge and understanding gaps are also prevalent, with investment often perceived as complex and exclusive to the wealthy.
To enhance retail investor participation, Makhlouf proposed three crucial ingredients: the availability of suitable products, ensuring retail investors have the financial education, autonomy, and advice to invest, and robust consumer protection frameworks.
He noted that policymakers and regulators, both domestically and across Europe, are actively working to reinforce these areas, with the Central Bank of Ireland supporting efforts to reduce investment barriers.
A necessary, long-term endeavor
This initiative is a critical step towards rebalancing Ireland's financial landscape, addressing a long-standing over-reliance on housing and bank deposits.
While the identified barriers are significant and deeply entrenched, the proposed multi-stakeholder approach offers a realistic path forward.
Its success hinges on sustained commitment to financial literacy and robust consumer safeguards, which are fundamental for building lasting trust in capital markets.