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Financial Services

Dáil Éireann Debate, Tuesday - 15 June 2021

Tuesday, 15 June 2021

Questions (59)

Bernard Durkan

Question:

59. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to explore ways and means to offset any negativity arising from Brexit with reference to banking and financial services here; if specific issues have arisen which might need corrective attention in the short and medium terms; if Ireland as an EU and euro state member can expect to flourish in the context of banking and financial services in the future; and if he will make a statement on the matter. [31741/21]

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Oral answers (7 contributions)

This question relates to the extent, if any, to which Brexit may have impacted positively or negatively on banking and financial services in this country.

I thank the Deputy. My officials, and officials in the Central Bank of Ireland, as our independent regulator, have been carefully monitoring developments to identify potential challenges in banking and financial services that could arise from Brexit and to take steps to prevent them occurring or, if that is not possible, to mitigate them. Thus far Brexit has had limited impact on the industry in the short term, given the preparation and relocations already undertaken as part of contingency planning for a no-deal Brexit.

A number of domestic legislative measures were introduced as part of contingency planning to mitigate some potential financial services risks, such as the insurance run-off regime and various legislative provisions to facilitate the successful migration of our settlement system from the UK CREST settlement system to Euroclear Bank Belgium. The signed EU–UK trade and co-operation agreement covers financial services in the same way that financial services are covered in the EU's other trade agreements with developed countries. In addition to the few financial services provisions included in the EU-UK trade and co-operation agreement, both sides agreed to establish a memorandum of understanding on structured regulatory co-operation on financial services. The memorandum will be an important measure to support continued co-operation between the EU and UK in financial services, given the integrated nature of our financial services systems.

To conclude on that, many of the negative issues we were concerned about with regard to financial services and Brexit have not yet developed. That is mostly due to the quality of planning put in place to deal with those risks. We have also had some gains in financial services across that period. In particular, I point to the success we have had with additional investment and employment from both Barclays and Bank of America Merrill Lynch.

I thank the Minister for his comprehensive reply. Does he foresee continued interest in potential relocation to this jurisdiction given we remain a member of the European Union? It was anticipated at an earlier stage that there would be fairly substantial relocation from the UK to this country. Has that happened and is it likely to happen?

I believe there are going to be further opportunities to grow the financial services sector here and to gain additional jobs. This is something the IDA is working very hard to deliver at the moment. To date we have been successful in attracting additional investment into our country as a result of the efforts of the IDA and the Department of Finance. The priorities I have at the moment are continued stability and safety, the protection of consumer rights with regard to financial services and ensuring the basic infrastructure of our financial services market continues to be secure with all of the change that is under way. We have done really good work on that to date and we will of course continue to look at other opportunities that are there. I point, for example, to some of the progress we have had with regard to rating agencies. We have seen Standard & Poor's and Kroll Bond Rating Agency locate their European head offices here in Dublin. We have done much but we do have more to do.

I further enquire about the degree to which the Minister and his Department continue to explore the possibility and the potential for relocation here and the potential for benefit to accrue to this country's banking and financial services as a result of remaining solidly within the EU, and the potential prospects that can create for those who invest in services here.

I thank the Deputy. The opportunities really are there. Our opportunities are more likely to relate to how we can increase the scale of the employers which are currently here, and how we can encourage them to have more operations and functions located here. If one looks at where we stand from an employer point of view, the breadth of employer and the breadth of investor we have at the moment is almost as high as it could be. As such, our focus should be on how we encourage and incentivise existing employers to locate more here. We have done so well to date but there are more opportunities in the future. As I have said, the IDA will lead in this, as will the Department of Enterprise, Trade and Employment. We will help in any way we can while of course being mindful of our mandate in relation to financial stability and the need for proper and effective regulation.

I thank the Minister. I can see that Deputy Murnane O'Connor has stepped out of the Chamber for a minute. I am going to skip all the way to Question No. 66.

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