Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Regulatory influence on Brexit moves limited - Irish central bank

Published 04/04/2017, 14:10
Updated 04/04/2017, 14:20
© Reuters. Governor Philip R. Lane looks on at the publication of the Central Bank of Ireland'?s review of residential mortgage lending requirements in Dublin
AIG
-

DUBLIN (Reuters) - The scope for one European Union centre to undercut another through its interpretation of regulatory rules in a bid to win business after Brexit is limited, Ireland's central bank governor said on Tuesday.

Financial services firms based in London are beginning to outline their plans to move operations to different member states due to concerns that Britain's vote to leave the EU will inhibit their ability to sell products in the bloc.

Ireland's government last month complained to the European Commission that rival centres were "offering a back door to the EU's single market" by allowing regulatory arbitrage, a reference to undercutting rivals with lax rules.

However Irish Central Bank Governor Philip Lane said that while there is a degree of variation across the system in the interpretation of rules, particularly in non-banking areas such as insurance, the ability of regulators to do so was narrow.

"The scope for regulatory arbitrage is limited. It's not zero, but it's limited. By and large, all EU countries operate under the same framework," Lane told a parliamentary committee.

"There are a lot of exchanges (among European regulators) about trying to come up with a common framework but it's not going to be conclusive, in the sense that there is still room for risk assessment and there will be differences."

Ireland is among a handful of EU members in contention to benefit from firms seeking new EU bases, but it has so far missed out on two high profile moves after U.S. insurer AIG (N:AIG) picked Luxembourg and insurance market Lloyd's of London [SOLYD.UL] chose Brussels.

Insurance sources said the greater flexibility shown by Brussels on capital, allowing Lloyd's to use reinsurance to transfer a larger amount of capital needed for an EU subsidiary back to its London headquarters, made its pitch more attractive.

Ireland's central bank has told firms considering moving that they expect them to set up a substantive presence in Ireland.

Lane reiterated that a number of factors, and not just regulation, would determine where firms opted to move and that it was too early to draw any conclusions on how Ireland would ultimately fare.

© Reuters. Governor Philip R. Lane looks on at the publication of the Central Bank of Ireland'?s review of residential mortgage lending requirements in Dublin

"Let's see as time moves on when there is a wider set of examples about the balance... We think across all sectors there is going to be a lot coming in terms of presence," Lane said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.