Central Bank vows Irish banks in good shape to face even hardest of Brexits

Central Bank vows Irish banks in good shape to face even hardest of Brexits
Central Bank

A hard or soft Brexit will affect parts or all of the Irish economy but Irish banks are in good shape and insurance customers will be protected to survive any fallout, the deputy governor of the Central Bank has said.

Ed Sibley said it is was working with the Department of Finance to plan legislation to allow insurers based in the UK and Gibraltar to continue to trade and honour policies but not to write new business, in the event of Britain crashing out of the EU.

Some consumers may still suffer as "niche" insurance policies from existing UK insurers come to an end.

Nonetheless, "the financial system is resilient enough for a hard Brexit not to cause significant financial stability risks", he told a banking industry conference. And despite some amount of "market disruption" that "the system as a whole should be resilient enough to withstand these bumps", he said.

Mr Sibley said more than 100 financial businesses had sought new permits to set up or permissions to expand operations in Ireland. "I am satisfied that from a financial stability perspective that the most material and immediate risks are now manageable," he said.

Separately, Mark Kennedy, managing partner at Mazars Ireland, said "some uncertainty" had returned for financial firms following the heavy defeat of Theresa May's Brexit plan. He told the Killarney Economic Conference that unregulated parts of financial businesses faced challenges.

Meanwhile, UK and Irish financial markets again signalled they were little affected by the political tumult in Westminster.

Expectations that weakened UK Prime Minister Theresa May will have to bend to the majority of MPs who favour a soft or no Brexit, and oppose a no-deal crash-out in March, have boosted the shares of UK and Irish companies exposed to the UK and any renewed fall for sterling.

The UK currency, which has long been a barometer of investors' fears over Brexit, rose for a second day.

Against the euro, it jumped to 87.91 pence, while the Ftse-100 closed slightly weaker.

Rising sterling tends to hit the Ftse-100 because the index includes many international companies. The Iseq ended little changed.

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