Saturday 7 December 2019

Forget trying to lure London bankers and focus on keeping the UK in single market

City workers walk past the Bank of England in London. Photo: Toby Melville/Reuters
City workers walk past the Bank of England in London. Photo: Toby Melville/Reuters
Donal O'Donovan

Donal O'Donovan

Calls for Ireland to try to sweep up high value banking jobs from Britain in the wake of the Brexit referendum are well meaning, but are getting ahead of the priority, which is to contain this major new economic threat.

The IDA here, and rivals in Frankfurt, Milan, Paris are all intent on attracting big banks that may now leave London if the vote locks them out of EU markets.

Our more pressing need, however, is for an EU/UK settlement that works for us - even if it means big banks and their jobs stay in London.

What Ireland needs is a deal allowing Britain to stay in the single market, and that retains the common travel area between here and the UK.

Read more: Sterling to slide further as political crisis grips Britain after 'Leave' vote

Some countries, and the Commission, will be actively hostile to cutting such a deal. It would be seen as too favourable to a Britain that has snubbed its former partners. Some countries won't care much one way or another.

The push at the weekend, from Brussels and elsewhere, for a quickie divorce from the UK should be a wake up call. That would be in no way in Irish interests, given the complexity of our political, social and economic ties with our nearest neighbour.

Ireland needs to set out a clear set of strategic and tactical goals, articulate them, and pursue them vigorously.

The Irish political, diplomatic, business and social communities need to be ubiquitous in Europe as long as the Brexit process is in train.

From Brussels to Bratislava and everywhere in between, no meeting of ministers, of bankers, farmers, or artists should not have a vocal presence making the Irish case.

Making the case to keep our trade and ties with Britain open is certainly more important than attempting to pick over the debris of the British crisis - especially if that boils down to trying to attract in banks.

Read more: Cameron to face EU over Brexit

A full banking ecosystem - with technology, legal and accounting support, will take years to develop. Its also not clear that regulators, in our case at the Central Bank of Ireland and at the ECB in Frankfurt, have the appetite or capacity to welcome in City whizz kids. ECB bank supervisors are new and untested. The Irish Central Bank has beefed up since the crisis, but officials will still admit they're stretched. Its possible to foresee Dame Street refusing to licence banks to set up here, if it fears it lacks the capacity to police them, regardless of any pressure from the IDA or Government. The focus right now is to press hard for a deal that keeps City banks in London, if it also keeps Irish stock on British shelves.

Irish Independent

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