THE HEAD of European operations at Bank of America Merrill Lynch has said progressive regulation would be a factor in encouraging the company to look at expanding its Irish operations.

Jonathan Moulds, who is in charge of the bank’s European, Middle Eastern and African divisions, said regulators needed to work constructively with the financial services industry rather than “point fingers” after the crisis.

“There is a tendency for either government or regulators not to understand the opportunity that there is to take some initiative here working with industry and the financial sector and not always pointing the fingers,” he said.

Mr Moulds said he has “productive and constructive conversations” with the Irish regulator, and welcomed improvements with the regulatory system. He recognised the need to strengthen the regulator further to deal with international policy and product changes.

“I do think it starts at the top, and it starts with the quality of the underlying regulators – you need a combination of people with broad international experience,” he said.

The bank was “very frustrated” by the lapse at its London trading desk which led to Dublin-based Merrill Lynch International Bank being fined €2.75 million by the regulator last October, he said.

The bank had a very open dialogue with the regulator, and reached “an agreeable conclusion to an episode with which we were frustrated about because it was a lapse from our side”, he said.

The bank has since taken strong steps to rectify matters, he said. Regulators were issuing very significant fines, he said.

“The fines are there rightly now to send a very strong message that governance and infrastructure controls are absolutely critical – I understand where the regulator is coming from,” said Mr Moulds.

The US bank, which employs 1,700 people in Dublin and Carrick-on-Shannon in Co Leitrim, operates its fourth largest international centre out of Ireland.

Mr Moulds said the Irish business would grow in proportion to international growth. Cross-border payments was a key growth area where the bank would look to expand further, and Ireland would benefit from this, he said.

The Irish bank reduced its headcount by 100, but escaped heavier cuts when Bank of America and Merrill Lynch merged during the global financial crisis, leading to 35,000 job cuts worldwide.