Monday 25 September 2017

No bank applications as Brexit effect is 'limited'

Little change since UK’s EU vote. Stock image
Little change since UK’s EU vote. Stock image
Colm Kelpie

Colm Kelpie

There have been little Brexit-related effects on Ireland's financial sector or economy so far, the Central Bank Commission has been told.

There have also been no applications from banks in the first half of the year to set up operations here.

Over a year since the vote, the bank's Brexit task force presented a report to the Commission which noted that despite increased political uncertainty in the UK, financial markets have not be adversely affected, according to minutes of the June Commission meeting.

"However, the period had seen a number of moderate developments in the sterling-euro exchange rate, with sterling weakening by about 2pc following the UK election and since then being driven largely by market expectations surrounding UK monetary policy," the minutes noted.

"The Bank of England's May Inflation Report contained a broadly unchanged outlook for the near term, although there were some signs of output growth and consumer spending and stronger inflationary pressures during 2017. Spillovers to the Irish economy seemed reasonably contained so far.

"Immediate Brexit effects in most parts of the Irish financial sector had been limited to date."

There have been no applications for banks looking for authorisation to set up operations in Ireland in the first half of the year.

Although Dublin has secured some Brexit wins from big name banks including Bank of America, no formal applications have yet been received, according to a separate report published by the Central Bank yesterday. The application process can take six months. About 24 applications have been withdrawn from across all sectors in the period, but the bank could not say if any of these had been Brexit related, noting the reasons for withdrawals can be many and varied.

Standard Life yesterday reiterated its plans to move some operations here as a result of Brexit.

The Commission minutes also noted that an extra 36 Brexit-related staff were being taken on in the Credit Institutions Directorate and Resolution Division. "Although there remained a high level of ambiguity regarding the final level of Brexit bank applications, there was sufficient clarity and a pipeline of applications that warranted the necessity to proceed to resource in order to address the increased demand," the minutes noted.

Headcount at the end of May was 1,618 full-time equivalents - a monthly increase of 21 and a year to date increase of 19. The minutes noted that the first targeted recruitment campaign for authorisation, supervision and inspection roles across financial regulation attracted 600 applications.

Irish Independent

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