Concerns about the Irish regulatory environment may be pushing US payments firms to establish European operations in locations other than the Republic, according to feedback provided by UK financial firms to the Irish Ambassador to Great Britain, Dan Mulhall.

The information was in a briefing note prepared by senior civil servants for Minister for Finance Michael Noonan in advance of a meeting with the governor of the Central Bank of Ireland, Patrick Honohan, on April 2nd.

The note, released to Sinn Féin’s finance spokesman Pearse Doherty under Freedom of Information legislation, quotes one participant saying: “Decision-makers at board level in the US are influenced by seeing their companies encountering far more regulatory problems in Ireland than, say, in Luxembourg.”

Redacted

It adds that a similar message was conveyed by a party, whose name is redacted, during Mr Noonan’s visit to California in March.

One group that met the Minister during his US trip outlined the difficulties it experienced two years ago in receiving a regulatory licence from the Central Bank to establish a European base in Dublin.

The company also highlighted that “to date, no online payments-services firm has been licensed in Ireland, which is in contrast to the situation in the UK”.

E-money licences

The note adds that just 11 payments authorisations had been provided in Ireland as opposed to more than 1,000 in the UK and that no “e-money licences” have been granted by the Central Bank here.

Western Union and Realex are noted as two payments institutions based in Ireland and regulated by the Central Bank.

The Minister was also briefed to the effect that the UK also has a “small-payment institution regime” that places a “less onerous” set of requirements on these businesses while also restricting their ability to passport.

“During his meeting, the Minister may wish to ask the Governor about any issues the Central Bank may have with authorising firms . . . that might affect the development of the market here,” the note said.

It was not clear last night if the Minister raised these concerns with the governor during their meeting last month.

The note also details lobbying by financial-services firms in Britain about the “overly aggressive” approach to regulation taken by the Central Bank. The regulator was also accused of being “too focused on minor, inconsequential infringements” by comparison to its counterpart in the UK.

This “negative feedback” was related by the financial firms to Mr Mulhall.

The note said while the UK regulator was viewed as being “equally aggressive”, it was seen as “much more pragmatic and consistent in how it deals with infringements by financial institutions”.

The financial groups were “clearly determined to convey a strong message on this front”, the note added.