Brexit-avoiding firms coming to Republic will face ‘intrusive’ scrutiny

Investment banks and brokers setting up in the Republic to avoid Brexit can expect plenty of attention from local and European financial watchdogs.

Michael Hodson, Central Bank director of asset management and investment banking, told a seminar in London that the Republic had attracted a significant number of new financial companies since the Brexit vote, many of them operating businesses new to the State and its regulator.

“In preparation for the ongoing supervision of these firms, we have recently established a new division within the Central Bank, the investment banks and broker dealers division,” he said.

Single supervisory mechanism

Mr Hodson pointed out that many of these companies fell under the EU’s single supervisory mechanism (SSM).

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He warned that “over coming months these firms can expect a high level of intrusive engagement” with both the Central Bank and SSM.

“We will seek to ensure that these firms stand up their operations as agreed with the Central Bank, put in place strong and robust risk-management processes and demonstrate their independence from any group or parent company in another jurisdiction,” he added.

Mr Hodson acknowledged the firms would have a limited effect on the Irish economy, but predicted they would have a much greater impact on a European scale.