Sir, – You report that John Bruton has called for a “rein on regulation” in the financial services industry (Business Today, May 11th). Isn’t it precisely the existence of a rein on regulation that got us into this mess in the first place? – Yours, etc,
JOHN GOODWILLIE,
Old County Road,
Crumlin,
Dublin 12.
Sir, – The current megaphone debate between the financial services industry and the Central Bank on over-regulation does the IFSC no service. Competitive jurisdictions for financial services feed off this.
It is very much a case of shooting ourselves in the foot. In the board rooms around the world this debate is referenced when decisions are being made on the location for new financial service operations.
Like it or not the debate is now positioning Ireland in the camp of heavy as against light regulation. This is a huge concern and needs to be managed. The trouble is that there are no benchmarks. The debate lacks merit. It is only of use if it involves comparisons with competitor jurisdictions. An honest broker such as the IDA needs to commission a study on current Irish financial regulation in an international context. It is the case that a significant amount of new regulation is driven by the EU. Again, industry references the return of IFSC banking licences. It does not mention the global contraction that has taken place in the sector nor the creation of substitute branch structures in the IFSC.
At the same time, the Central Bank references names like Cologne Re and Depfa as the reason for the need for the current regulatory regime of international players in the IFSC. This lacks perspective. The IFSC has been around for 25 years.
Any problems in the IFSC pale into insignificance to the debacle in the domestic financial services industry. Everyone recognises the need for a sea-change in the regulation of domestic financial services. The regulation of the IFSC needs to be more carefully calibrated.
The Central Bank recognises this but it is not getting its message across to industry and it is not recognised internationally.
Who regulates the financial regulator? How this happens is not clear. However, the current slanging match shows something is wrong and needs to be quickly rectified. – Yours, etc,
JAMES DEENY,
Rostrevor Road,
Rathgar,
Dublin 6.