Wednesday 23 October 2019

Financial system 'able to withstand no deal' - but firms warned to get ready


Central Bank Deputy Governor Ed Sibley. Photo: Tony Gavin
Central Bank Deputy Governor Ed Sibley. Photo: Tony Gavin
Ellie Donnelly

Ellie Donnelly

The financial system here is "resilient enough to withstand a hard Brexit", according to the Deputy Governor of the Central Bank, Ed Sibley.

Nonetheless, he warned that the industry and consumers would "clearly" be negatively affected should the UK leave the European Union without a deal on October 31.

"Frictions will inevitably arise," Mr Sibley said. "However, the system as a whole should not amplify the shock and will continue to be able to serve the economy, consumers and investors."

He made his comments yesterday at the Insurance Ireland-PwC CEO survey report launch.

Mr Sibley, who is responsible for prudential regulation, urged business leaders to plan for the possibility of a no-deal Brexit, adding that not all regulated firms were adequately prepared.

"There is no excuse for this, even accepting that there remains considerable uncertainty," Mr Sibley said.

With just 33 days until the UK is due to leave the EU, and increasing turmoil in Westminster, Mr Sibley highlighted the risk of what he called "Brexit fatigue" arising. He added that it was "critical" firms have considered all the affects Brexit could have.

"You owe all your stakeholders, including and most importantly your customers, a duty of care to ensure that you are prepared," he added.

Meanwhile, Mr Sibley said too many insurance firms are "not getting the fundamentals right" when it comes to technology. Changes in this area would affect both how insurance is offered, as well as what is insured.

On the matter of diversity at management level among financial services firms, the regulator is "committed" to driving improvements in this area, he said.

Among the benefits of greater diversity is a reduction in the likelihood of 'groupthink' in businesses, improved decision-making and enhanced risk management, Mr Sibley added.

He pointed to what was "a concerning lack of gender diversity" at top levels in the insurance sector, in particular.

Irish Independent

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