Ever since the Brexit result on June 24th, there has been much speculation about the relocation of London-based financial services companies to Dublin to retain their EU passporting rights.
While we're none the wiser as to who might relocate here, there has been some clarity on the authorisation process from the Central Bank of Ireland.
Speaking at an event organised by the Banking and Payments Federation of Ireland yesterday, Ed Sibley, director of credit institutions supervision at the Central Bank, made it clear that there would be no shortcuts in the authorisation process.
And he expects the time horizon for authorisations to be “at least a year” before applications are completed.
Each one would undergo a “thorough and robust assessment process” that is “clear and transparent and in keeping with the principles, processes and procedures of the Single Supervisory Mechanism”, Sibley said.
The Central Bank expects that any banks looking to move here will have senior management and board level executives who are “fit and proper, substantively present and engaged in the running of the bank”.
It must have local decision-making that is “robust and not simply blindly” following instructions from the group, and there must also be “sufficient local oversight and control over outsourcing arrangements” with booking practices “understood and well-managed”.
Wrong mindset
“In short, if banks are asking themselves what is the bare minimum they need to do to get authorised so that they can carry on with the minimum of disruption to the existing operations, then they are entirely in the wrong mindset.”
Sibley also made it clear that it was not the role of the Central Bank to promote Ireland’s financial services sector, and it has a “broadly neutral view as to whether new entrants relocate” here.
“We are not in the business of providing free consultancy, but recognise that there is a need for significant engagement between a bank and its regulator before, for example, authorisation applications are formally submitted.”
Sibley noted that a potential downside of these relocations for the Central Bank could be the poaching of its staff by company’s moving here.
“These firms are likely to have significantly more flexibility from a remuneration perspective than we do, and so we do need to steel ourselves for further increases in the levels of turnover in some areas of the bank,” he said.
It’s a stark warning, not that staff will be complaining.
