Central Bank can't revert to 'booster' role
A top Central Bank official says it must never take back the promotional mandate it held in the pre-crisis era - despite mounting pressure from some quarters for it to adopt a more flexible approach to Brexit-driven inward investment.
The comments are a response to critics who say the regulator's approach has turned off some potential investors.
Gerry Cross, the Central Bank's director of policy and risk, said that if lessons of the financial crisis are to be learned, the bank must steer clear on any promotional role.
His comments, made to an audience of bankers at a European Financial Forum conference in Dublin, reiterate the stance taken by Central Bank deputy governor Sharon Donnery last December followed a letter to the Central Bank, by Minister for State with special responsibility for financial services Michael D'Arcy.
That letter, first reported on by this newspaper, queried whether the regulator had adopted an "unhelpful attitude" and of running "unclear processes" that were hampering the State's efforts to attract post-Brexit financial services sector investment.
Mr Cross also argued the risks of an "arbitrage gap" breaking out between European financial regulators, had now been eliminated. In the wake of the UK's vote to exit the bloc, Mr Cross said this "fragmentation" had been a chief concern of the Central Bank, as states raced to compete for post-Brexit relocations.
But he claimed the "arbitrage dynamic" has virtually disappeared and insisted firms are now "confident the approaches are pretty much the same wherever you go in Europe".
Earlier in the day the Central Bank's Governor Philip Lane said "attempts at regulatory arbitrage will not succeed".
At yesterday's event the president of US bank Morgan Stanley, Colm Kelleher, said it will take a "multi-centred" approach to where it will base staff in EU after Brexit, including basing staff in Frankfurt, Paris and Dublin.
While Ireland has drawn a string of international financial services firms, including Morgan Stanley, JPMorgan, Barclays and Legal & General looking to expand or establish operations in Dublin, other EU cities, like Frankfurt and Paris, are seen to have gained more from Brexit.
Governor Lane said he expects more financial firms to seek authorisation to operate in Ireland.
Despite this anticipated gain he stressed Brexit represented a "long-term" negative for the Irish economy.