Dáil Éireann Debate, Tuesday - 27 March 2018
109. Deputy Thomas P. Broughan asked the Minister for Finance the impact he views Brexit will have on the banking and insurance sector; and if the German community bank, the Sparkasse, will shortly be commencing operations here. [11011/18]
Amharc ar fhreagraAs the Deputy will understand, any negative impacts on the macro-economy of either or both the UK and Ireland would impact Irish banks and insurers.
From the date of the UK exit (or, if agreed, the end of a transition period) Irish banks and insurers which rely on a “passport” to provide services into the UK and vice-versa will lose the right to provide such services. As a result impacted firms in both Ireland and the UK are extensively engaged in contingency planning which may result in the relocation of business from the UK to the EU (including Ireland) and vice-versa. The Central Bank of Ireland and the Prudential Regulatory Authority (PRA) in the UK are in intensive dialogue with firms who are impacted and it is important to note that not all firms are impacted and/or impacted in the same way. The European regulatory system is formulating the supervisory guidance on the many issues raised by Brexit and the Central Bank of Ireland is heavily involved in the design of these policies through our participation in the SSM and the European Supervisory Authorities. While many firms are moving forward with Brexit preparation plans, the final impact of Brexit on banks and insurers will depend on the outcome of the EU27-UK negotiations, with the nature and duration of transition arrangements an important factor in determining the speed of adjustment.
My Department’s preparation and contingency work is ongoing and continues to examine all possible scenarios and challenges, and is a key input into the whole of Government approach. As part of its contingency planning, the Department is engaged on an ongoing basis in examining the potential impacts of Brexit on the financial services sector and potential mitigants. As part of this work the Department liaises with other Government Departments and Agencies who have responsibilities in this area, including Enterprise Ireland and the IDA. The Department also engages closely, via the Financial Stability Group with the Central Bank of Ireland, which has the statutory responsibility for financial stability. Brexit is a standing item on the Group’s agenda.
Additionally, the Government’s strategy to mitigate the impact of Brexit includes fully exploiting opportunities arising. With regard to the Financial Services sector, Brexit will provide opportunities for Ireland to increase its share of financial services based inward investment. In that regard, Minister of State Michael D’Arcy T.D. has responsibility for Financial Services, including the implementation of the IFS2020 Strategy for driving growth in the financial services sector.
As the Deputy is aware, my Department, along with the Department of Rural and Community Development are assigned the responsibility of fulfilling the Programme for a Partnership Government commitment to "thoroughly investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions". Officials in both departments have been working closely together and have finalised a report on their investigation on local public banking. My colleague, the Minister for Rural and Community Development, Michael Ring T.D. anticipate being able to jointly submit the report to Government, for approval, in the near future.
