Big UK business banks told: ‘Don’t come to Ireland’
Big banks are being discouraged from setting up in Ireland following the Brexit vote because they're seen by some officials here as too risky.
The international news agency Reuters reported the Central Bank had indicated to global investment banks they would face a tough time getting approval to shift operations here.
The Central Bank insisted it's not trying to turn away investment.
Ireland has been tipped as a contender to attract tens of thousands of high-end banking jobs displaced from London as a result of Britain's vote to leave the EU.
Other countries, including France and Germany, have launched fierce campaigns to try to woo banks leaving London, which is currently Europe's undisputed financial services capital. A mass shift of big banks into the Eurozone could take a decade, but would potentially reshape the economy.
The Reuters report said Ireland was reluctant to absorb large-scale investment banking, which involves advising and financing large corporations, and is the most lucrative of all banking activities.
"Our sense is the appetite in Ireland is not that high for balance sheet banks," a source at a global investment bank said.
Another source said the Central Bank's lack of regulators was an issue: "A lack of specialised supervisors and the risk of sophisticated investment banking to the state makes Irish regulators reluctant to host such banks in Dublin. It is difficult to find enough regulators. A growth in highly sophisticated financial services companies would be a real worry."
Investment banks like Credit Suisse, Barclays, Goldman Sachs and Morgan Stanley are working out how to secure access to the European Union when Britain leaves the bloc. Each employs thousands of people in the UK.
The Central Bank has warned it is struggling to keep regulators, including because pay is higher at the European Central Bank and the private sector.
However, the Central Bank denied it is reluctant to license investment banks. "Since the UK referendum, the Central Bank of Ireland has met a number of financial services firms which are examining re-domiciling in full or in part from the UK to other EU countries. At no time in these discussions has the Central Bank ruled out any particular business model as being unsuitable, or beyond its risk tolerance," the spokesman said.
Any big bank looking to set up here would be subject to the same requirements and approach as in any other Eurozone country, the spokesman added.
Junior Finance Minister Eoghan Murphy, who is in charge of financial services, said: "We're doing everything we can to protect our interests and to protect and grow our financial services. But we won't be returning to boom and bust. We have seen significant interest from major firms and banks in Ireland as a top choice for relocation and we are managing that interest on a daily basis. There are opportunities here for Ireland and it's in the national interest that we grab them and we will."
A spokesman for Finance Minister Michael Noonan dismissed the Reuters report as inaccurate: "We haven't been encouraging or discouraging large investment banks. There is no particular policy on one type of bank or financial institution over another."
Reuters said the perception among big banks in London was of caution in Dublin.
"If you've come from all the troubles Ireland has, you want to be very careful about taking on risks," a source said.