Over-regulation of the financial sector is damaging the competitiveness of the Irish economy, the chairman of Financial Services Ireland said last night.
Mr Willie Slattery, who is also chief executive of IFSC group State Street International (Ireland), said there was "a palpable sense of unease" within the financial sector about the dramatic increase in the regulation of the Irish economy in recent years.
"This affects not only the financial sector but the whole economy, including the regulation of companies, the regulation of utilities and the regulation of our physical planning environment, not to mention substantial extension of responsibilities of the financial regulator," he said.
"In public debate in Ireland, more regulation is regarded as good and regulation is regarded as a panacea for all sorts of public policy issues."
Speaking at the annual dinner of Financial Services Ireland, an IBEC lobby group, representing the financial services industry, Mr Slattery said too little attention was paid to regulation costs, which he said affected the freedom of the market to function properly. "This is a hidden, insidious, but very real and substantial cost."
Mr Slattery added that Ireland could not afford to do "solo runs" that imposed more restrictions on businesses compared to other competitor jurisdictions.
"We are not arguing for a 'fast and loose' regime. We need smart, ethical, effective, responsive and competitive regulation. As an example, the Companies (Auditing and Accounting) Bill, as originally published, fell far short of this test." Referring to the Competition Authority's banking sector review, Mr Slattery said the financial sector was not arguing that improvements could not be made, but the Government's policy responses to the review should be cost-effective.
