Reporting extended to ‘special vehicle’ firms

The Central Bank plans to extend reporting requirements on the activities of financial corporation vehicles which are registered here but service financial activities across the global economy.

There are over a thousand financial vehicle corporations and special purpose vehicles registered in Ireland, a Central Bank study has revealed.

It said there is a “significant non-bank financial sector” such as international money funds based in the country. Such corporations are linked to the international economy, and have few direct links to the Irish economy.

The Central Bank wants to increase transparency of their activities and will therefore extend its reach to have such corporations report to the Central Bank.

It is also making contingency plans in case Britain leaves the EU, but it was difficult to assess the effect such a situation would have on economic growth here.

British Prime Minister David Cameron plans to renegotiate ties with Europe, and then hold a referendum by the end of 2017. This situation has thrown up difficulties for what Central Bank chief economist Gabriel Fagan called “very initial stage” planning.

“We in the Central Bank and a number of other institutions in Ireland are now actively working the issue and the implications of a possible ‘Brexit’ on the Irish economy,” Mr Fagan said.

The UK exiting the EU would cost the Republic’s economy billions of euro in lost exports and threaten the security of thousands of jobs across the whole of Ireland, the Institute of International and Economic Affairs warned earlier this year.

The think tank said it detailed the economic and political “disaster” facing the island’s economy, north and south, if Britain were to cede from the EU.

In Britain and Europe: The Endgame, the institute warns that a British exit would strip 3.6%, or about €6bn, from the Republic’s huge export base should full tariff barriers be reinstalled in Britain and the North.

Additional reporting, Reuters