EU to calm Brexit rivalry

The EU wants to avoid Brexit turf wars by extending its oversight of financial services.

The move follows a complaint by Financial Services Minister Eoghan Murphy that other EU countries were undercutting Ireland in a bid to woo banks and insurers from the UK.

“Already now, we actually hear some signals that, with the UK leaving the EU, some member states are accusing others of lax enforcement of common rules,” European Commission vice-president Valdis Dombrovskis told reporters yesterday.

“We see this as a case, also, to give ESAs [European Supervisory Authorities] a stronger mandate to ensure this regulatory convergence — convergence of also regulatory supervisory practices — in order to avoid that kind of perception that member states may be using their supervisory practices as a competition tool,” he added.

Mr Murphy raised the issue with Mr Dombrovskis in a meeting earlier this month.

In a sign that Ireland faces tough competition, insurance giant AIG said this month it would move its base to Luxembourg after Brexit.

The EU has separate regulators for banking, insurance and financial markets, based, respectively, in London, Frankfurt, and Paris.

In a consultation document tabled yesterday, the commission suggested merging the two former bodies, which if approved, could muddy Ireland’s bid for the banking authority.

“Quite a few member states have already expressed some interest in hosting EBA [the European Banking Authority] but at this stage we do not have a ready-made answer to this,” said Mr Dombrovskis.

It is up to EU leaders to decide on where to locate UK-based agencies after Brexit, but the Commission provides guidelines on what to consider ahead of the move. Mr Dombrovskis said he wants a decision on the EBA’s future home to be made before Brexit talks are concluded in 2019.

“We need to take this decision relatively quickly, so not to wait for the end of negotiations,” he said. “We cannot leave this to the last moment.”

A spokesman for the Department of Finance said: “Ireland continues to compete strongly for financial services relocation arising from Brexit.”

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