'We do want UK banks to come here,' says Roux
The Central Bank hasn't tried to put any UK-based banks off coming here in the wake of the Brexit vote, and is receiving applications from a range of sectors, its deputy head has insisted.
The Deputy Governor of the Central Bank, Cyril Roux, said yesterday that the regulator has not discouraged investment banking or trading in Dublin, contrary to recent reports.
The statement contradicts reports that Irish authorities had discouraged UK firms from relocating here after Brexit because of regulatory concerns about how they would be policed.
Yesterday, Mr Roux was adamant this was not the case.
"I want to be clear ... we do not have such a position. We have not sought to dissuade any such entities from seeking authorisation nor are we planning to do so," he said.
However, he said that the Bank will only allow businesses in Ireland that have a "substantive presence" in the country.
Mr Roux said the Bank was not concerned about the arrival of major firms, but that smaller financial institutions may attempt to use Ireland as a convenient base within Europe, while the companies retain their real operations in the UK.
"The flagship firms are not a problem. They don't expect to bring a big balance sheet here and have a handful of people.
"There are some other firms of a different nature who believe you can just come here and nail a brass plate and rent a room and keep on doing everything from the UK. We have to tell them it's not going to happen.
"The Irish financial sector is set to grow, and quite possibly to a significant extent. The Bank is committed to meeting the challenge," Mr Roux said, adding that Dame Street was ready to hire further staff next year to cope with an increased workload.
Mr Roux said there had been "a material increase" in the number of UK-based firms inquiring about becoming licensed in Ireland.
He added the applicants would be met with an "engaged, efficient, open, and rigorous" approach from the Central Bank. He said the new applications were across "the whole spectrum".
"We are seeing applications for licensing for firms that are not based here, but we also see very significant indications from regulated firms that are small today but want to be big tomorrow," he said.
Mr Roux spoke of the action the Bank has taken recently with regard to fines for financial firms who overcharged customers on tracker mortgages.
Permanent TSB (PTSB) was fined €4.5m earlier this week for "serious failings in its obligations" to tracker customers relating to mortgages owned by Springboard, a sub-prime unit.
PTSB will also be forced to pay €5.8m in redress to 222 customers affected by the overcharging.
Mr Roux also stated that the Bank will be advising the Government against introducing legislation - proposed in the 2016 Finance Bill - that would cap variable mortgage rates being charged by lenders.
"In a nutshell, we believe that the Bill would conflict and interfere with our monetary and prudential mandates, while having counterproductive effects for our borrowers," he said.
The Central Bank has "a consumer protection mandate", he said, "but it is not a competition authority. That is an important distinction."
The issue of rising insurance premiums was also raised, but Mr Roux said the Bank was powerless to intervene because of EU law.