Regulation ‘harming financial services’

IRELAND is becoming increasingly unattractive for investment because of tighter regulation, the financial services industry warned yesterday.

Financial services industry chiefs warned the Government that less, not more, regulation is needed.

William Slattery, chairman of Financial Services Ireland, which represents the banking industry, warned against a knee-jerk reaction to last week’s money laundering events.

“The flexible regulatory environment has led to huge overseas investment and this investment should not be taken for granted. We’ve had an enormous amount of regulation over the last 15 years, but no regulation in the world would have stopped the events that happened over the weekend,” Mr Slattery said.

“Anyone who tries to introduce regulation to cater for those extreme activities, will simply end up closing down the rest of the economy. What I am arguing for is balance when we are contemplating regulatory measures.”

Mr Slattery said incoming provisions under the Companies (Auditing and Accounting) Act 2003, will place huge burdens on company directors.

Under this change to the Companies Act, all company directors will have to sign off on accounts stating that they are compliant with all aspects of the law.

Mr Slattery says the cost of this is excessive and will make the country less attractive to foreign investors. He said it was not a case that companies coming here wanted as little regulation as is the norm is tax havens like the Caymen Islands, but a level playing field with other countries.

Separately yesterday, Finance Minister Brian Cowen said the Department of Finance was looking at potential successors to the SSIA schemes.

The first accounts are due to mature next year and the minister said the department is looking at possible alternatives.

But Mr Cowen added: “People have invested their own money and they are entitled to get their money and spend it anyway they want. And I don’t buy the idea that having been prudent in saving the money, they are all going out on a splurge and acting irresponsibly.”

Mr Cowen also paid tribute to banker Phil Flynn who resigned from the Government’s decentralisation implementation body last Friday after being linked with the Cork company at the centre of the money laundering probe.

Mr Cowen said Mr Flynn had done “excellent” work for the body and he would be a big loss.