DUBLIN: The Central Bank has begun laying the groundwork to accommodate a significant number of London-based financial services firms looking to move operations to Dublin in the wake of Brexit.
Gerry Cross, the Central Bank’s director of policy and risk, said it was poised to help businesses “think constructively” about relocation, and would take a practical approach as firms look to get their business models approved and their companies authorised. Mr Cross said the bank had seen “inquiries and interest” from a significant number of firms.
“These firms are of many different types and cover a wide range of activities,” he said. “We recognise the practical constraints that firms are facing.
“Particularly around some of the timing issues, for example setting up businesses in Ireland, getting authorisation and thinking about model approval.
“We have no objection to thinking constructively with firms about how this sequencing challenge might be addressed, without undermining our commitment to our responsibilities.” London’s financial firms are waiting with bated breath to discover whether the UK can hold on to the passporting rights that allow them to trade freely across the EU.
Last week, the Industrial Development Agency (IDA) said more than 100 companies, many based in the City, had inquired about relocating to the country after Brexit.
“There is also the important question of group-wide models and how they might operate,” Mr Cross said. “This can be a very complex question with many aspects including questions of supervisory reliance.
“The Central Bank of Ireland’s good and long-standing relationship with UK and other authorities means that we will be in a good position to work through these aspects effectively and efficiently.” The Central Bank is bolstering staff numbers in its insurance supervision directorate by more than a quarter as it looks to welcome insurers from London.
However, the bank has moved to deny reports that Ireland was discouraging firms wanting to move investment banking or trading operations to Dublin because of regulatory concerns.
In a speech earlier this month, Cyril Roux, the Central Bank’s deputy governor, said: “We have not sought to dissuade any such entities from seeking authorisation, nor are we planning to do so.”
The Central Bank has made clear that it does not want firms setting up small operations in Ireland just so they can access EU passporting rights. Mr. Cross said firms must demonstrate they had “proper business models, with convincing risk identification and management, suitable products, sound finances, and strong boards and executives” before gaining approval in Ireland.
“The Central Bank has not ruled out, and is not planning to rule out, any particular business model on financial stability grounds,” he said.
