Finance firms moving business to Ireland post-Brexit must ensure that management of these operations is also based here to win regulatory approval, according to the Central Bank.
Central Bank director of policy and risk Gerry Cross told an event organised by Asia Matters, a think tank chaired by former minister for finance Alan Dukes, and Financial Services Ireland on Monday that the regulator is only interested in authorising services that will be run from Ireland.
“We will want to be satisfied that the mind and management of the entity are located here and decisions are taken here,” Mr Cross said.
The comments come as the Central Bank believes the “material number of enquires” from firms based in the UK since the Brexit referendum in June is now evolving into companies drawing up short lists of possible EU locations to which to move business.
“A number of these [are] focusing specifically on Ireland,” Mr Cross said.
IDA Ireland, which is responsible for inward investment, is competing with organisations in cities such as Paris, Luxembourg, Amsterdam and Warsaw to win a key slice of the spoils as UK-based financial firms weigh alternatives to the City of London. The Government is targeting 10,000 additional jobs in international financial services in Ireland by the end of 2020, according to an action plan published on Monday.
Global assets
International finance in Ireland currently employs about 35,000 people, ranging from back office services for almost €2 trillion of global assets in Irish-based funds, banking and insurance.
Mr Cross reiterated the Central Bank’s stance that it is committed to providing a transparent, consistent and predictable approach when it came to assessing firms seeking authorisation in the wake of Brexit.
“For the authorisation process, we are focused on the firm’s understanding of the risks, and how they are managed and mitigated,” Mr Cross said. “This applies both in respect of the ongoing state of the firm and in the event that the firm was to get into difficulties and fail.”
He said there continued to be much uncertainty around the future of passporting of UK financial services across the single EU market after Britain leaves the union, notwithstanding British prime minister Theresa May outlining plans to leave the market. Ms May has set her sights on a comprehensive free trade agreement which would allow the greatest possible access to the market.
