Central Bank issues warning to firms setting up in Ireland over hard Brexit
A Central Bank director said it will not provide an insurance policy to firms for ‘inadequate’ Brexit planning.
The Central Bank of Ireland said it has “no appetite” for international firms setting up in Ireland as a last resort for a hard Brexit.
Michael Hodson, the director of asset management and investment banking, issued the stark warning to financial businesses, saying it will not provide an insurance policy to firms for “inadequate” Brexit planning.
Speaking at a Brexit seminar in Dublin, Mr Hodson said that since the referendum in June 2016, there has been an increase in the number of applications from financial businesses who want to set up in Ireland.
These include applications from banks, investment firms, electronic money institutions and insurance companies.
Michael Hodson, Director of Asset Management @centralbank_ie delivering his keynote address at the seminar "The onus is on Irish firms to register with the FCA for temporary permissions regime to access the UK market before the end of March" #agenda @KPMG_Ireland @UlsterBank pic.twitter.com/9tDoiTf2oJ— British Irish Chamber (@BrIreCham) January 24, 2019
“We will not lower our assessment standards and if you have not delivered on our expectations, we will not authorise you,” Mr Hodson said.
“No firm should expect the Central Bank to provide an insurance policy for inadequate Brexit planning.
“We have no appetite for firms who have not done the work or for firms who have no real intention of setting up a substantial business in Ireland or rather see their authorisation as a last resort for a hard Brexit.
“In addition, a number of applicants are bringing new types of businesses to the Irish market and operating complex business models.
“At this stage, a number of firms have already received approval for authorisation and we expect that a sizeable number will continue to be approved in the coming weeks.”
He also warned that the risk of a hard Brexit remains.
“We expect firms to have Brexit contingency plans in place for all Brexit scenarios,” he added
The stakes for Ireland are so high given our close ties to the UK. Simon Barry
The British Irish Chamber of Commerce hosted the Brexit conference with Ulster Bank and KPMG to address the implications surrounding Brexit on the financial services sector.
Simon Barry, chief economist at Ulster Bank, said Irish businesses are pursuing alternative sources of market growth outside the UK.
He added that Ireland can tap into opportunities as UK firms try to cope and manage Brexit uncertainties.
But he said that the bank has started to see the effects of Brexit uncertainty on their customers and businesses, who are triggering contingency plans and scaling back investment proposals for the UK economy.
“The stakes for Ireland are so high given our close ties to the UK,” he continued.
“The UK political system still hasn’t landed on a settled point around where it wants to be and pitch its new future relationship.
“It really is a remarkable feature of how the way politics has unfolded.
“If you want full independence from EU institutions, rules and structures, then you are moving further away from access to the Single Market.
“The more access you have to Single Market, the less damage Brexit will do to your economy.”
Michael D’Arcy, Ireland’s Minister for Financial Services and Insurance, described Brexit as an “overarching challenge” for Ireland.
“Britain’s exit from the EU will be the defining moment between our relationship both with the UK and the rest of the Europe,” he added.
“In light of the ongoing uncertainty in the UK, we continue work to prepare for the UK’s exit from EU, and the European Council has asked for this work, at national and EU level, to intensify, taking to account all possible outcomes.
“A no-deal Brexit is the worst possible outcome for the UK, Ireland and for the EU.”