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Ireland 'may have overcompensated'

06/06/13

The financial crisis in Ireland may have led regulators in the country to over-compensate and generate overly harsh legislation, with fears that businesses could leave for sunnier climes if they are not offered competitive rates.

One of five commissioners at the US Securities and Exchange Commission, the country's markets regulator, warned that legislators should be very careful with the tax regiment they are setting up.

Daniel Gallagher, one of two Republican commissioners at the SEC, said regulatory change has been "pretty intense" over the last three years, reports the Irish Times.

While it's obviously important for financial services workers in Ireland to avoid making the same kind of mistakes they did in the past, too much regulation can act as a deterrent to the growth the state desperately needs.

Richard Pennycook, the former financial director of Morrisons, recently pointed out that strong leadership is just as important as putting risk management procedures in place, and ensuring the right executives are leading up the industry is crucial in Ireland.

"At some point it's got to stop and people need to evaluate what is the impact globally and domestically; I think Ireland has hit that point," added Mr Gallagher.

Speaking in Washington ahead of his arrival in Ireland today to speak at a European corporate governance conference, he pointed out that the financial services sector is central to the Irish economy and needs to be protected to some extent.

He also suggested that attempts by the UK to opt out of new pan-European regulations of financial services could prove disruptive for the Irish economy and stifle some of what makes the country such a vibrant and attractive place for global firms.

There has been controversy recently over Google's decision to base its headquarters in Dublin, where it pays less tax than it would in England.

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