Central Bank won't bend rules to lure Brexit influx
Regulators need to get the balance right, combining "pragmatism with appropriate rigour", when dealing with Brexit, Gerry Cross of the Central Bank has said.
He warned that any lowering of standards in order to attract banks and insurers to relocate here would "lead us down a road of regret".
Mr Cross was speaking at the Federation of International Banks in Ireland conference in Dublin yesterday.
Yesterday, Ireland lost out as Japanese banking giant Nomura settled on Frankfurt as the headquarters for its European Union operations post- Brexit, people with knowledge of the matter said.
Frankfurt, helped by its hosting of the European Central Bank, has emerged as one of the favoured options for global banks seeking to relocate jobs from London. Goldman Sachs and Morgan Stanley are scouting for office space in the city, which could serve as their new trading hub inside the EU, people with knowledge of the matter said earlier this month.
Ireland has had fewer high profile wins from firms exiting London as a result of Brexit. US giant JPMorgan is understood to be scouting for offices here after already committing to an Irish expansion, but insurers Lloyds of London and American International Group (AIG) opted for Brussels and Luxembourg over Dublin.
Ireland's so far slim haul of finance jobs leaving the UK because of Brexit has raised concerns, including from Minister Eoghan Murphy, that slacker regulation elsewhere in the EU is being used as a carrot.
Privately, some finance sources say the Irish Central Bank's relatively stand-offish approach to potential investment has been an issue.
Gerry Cross said a key issue for regulators here is that any incoming bank or insurer seeking a licence is really planning to set up here.
"One of the major issues that has come to the fore over the recent period is the question of "substantive presence".
"This is the question of how much of its activities a firm needs to carry on from a particular jurisdiction in order to be able to ask to be authorised there," he told the conference.
He admitted that while there have been "considerable concerns" that different jurisdictions would take different approaches, good progress had been made on setting standards, with more on the way.
Meanwhile, the IDA's head of international financial services, Kieran Donoghue, said the agancy was "aggressively" looking to attract firms from the UK to Ireland.
"I'm confident that there will be a flow of announcements," he said.
Japan's biggest brokerage, Nomura, has around 3,000 employees in Europe, mostly in London. It's set to move around 100 roles to Frankfurt as a result of Brexit.
Its rival Daiwa, is looking at Frankfurt and Dublin for its EU operations.