Kevin Sherry, head of the Government’s business development agency, Enterprise Ireland, said it was important to differentiate between retail bank lending failures which led to our housing bubble, and Ireland’s track record with international financial services, which “continued to survive and prosper”.
He said: “There were insufficient controls in place in relation to the percentage of borrowing that someone could secure in that area, for domestic housing, and as a result the banks suffered heavily in that. But it wasn’t in [broader] financial services.”
Dublin is among a number of EU financial hubs hoping to attract businesses fleeing London after Brexit.
However, the minister responsible for promoting Dublin as a financial centre has reportedly fielded complaints to European Commission officials over the “aggressive” tactics of rival cities which he claims are offering lax regulation to undercut the competition.
When asked whether trust in Ireland’s financial regulator has been re-established, Mr Sherry said: “Yes. There is trust, and we’d be very confident about the financial regulatory environment that is in place in Ireland which is very robust.”
He stressed that Ireland would take adequate precautions if financial services choose this country as their new EU base: “It wouldn’t be any type of financial instruments or financial activities that could be undertaken in Ireland. It is ones that would actually pass rigour of the financial regulator and our central bank, which is a stringent process, and rightly so.”
It emerged last week that insurance giant AIG will shift less than a dozen London-based executives to head up a new EU subsidiary in Luxembourg, which it is understood is also frontrunner for a subsidiary location for Lloyd’s of London.
Experts widely expect Frankfurt to be the main beneficiary of a post-Brexit exodus, considering factors like the strength of its economy within the Eurozone, and the reputation of its financial regulator, BaFin.
It is understood that Japanese investment bank Daiwa is finalising plans to set up a new European base in Frankfurt. In January, Daiwa executives said the firm was working with consultants and was considering both Frankfurt and Dublin as locations.
However, Ireland is still in the running as a financial services destination and could attract businesses with its lowe corporate tax rate of just 12.5%. Barclays is considering expanding its Dublin offices where it already has a subsidiary, allowing the bank to access the EU’s single market.
However, it is not clear whether London-based jobs would be moved or if new staff would be hired.
Others like JP Morgan have yet to settle on a location, though its chief executive Jamie Dimon has said that around 4,000 of its 16,000 UK staff could be shifted out of Britain.