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Ireland 'can become compliance hub'

01/10/13

The current furore over banking regulation in Ireland can be turned to the country's advantage if it takes advantage of changes in the sector to become known for its adherence to the rules, a former taoiseach has posited.

President of the Irish Financial Services Centre John Bruton recently told a banking conference in Dublin that Ireland can become a centre of excellence for compliance and risk management in the future, reports the Irish Times.

Mr Bruton served as taoiseach from 1994 to 1997 after a long career in the cabinet and has since gone on to a number of key roles in the banking sector.

While there has been a great deal of negativity about the future of Ireland's financial services industry, his attitude highlights the fact that the potential for growth and expansion still exists.

"Complex regulation is an inherently expensive business," he argued, suggesting Irish experts could take some of the weight from their international counterparts and allow the country to become known for its compliance skills.

"The recent decision, contained in the recent Central Bank Act, to allow non-EU banks to open branches here is a major opportunity. Some banks, now operating in the UK in high cost locations, may be able to relocate activities on a branch basis in Ireland," he added.

Despite this glass-half-full attitude, Mr Bruton warned that over-regulation driven from Europe could have a negative impact on banking services across the continent, including in Ireland.

He cited a recent study on banking by McKinsey that estimated if all the regulations currently in the pipeline were now in force the amount of equity return gained by European banks would fall from ten per cent to six per cent.

The former taisoeach concluded that Irish companies can benefit from some of the changes currently afoot, particularly if they position themselves as industry leaders when it comes to the compliance measures being put forward by the EU.

 

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