| Central Bank to consider applications for non-EU bank branches, in widely welcomed move |
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The Central Bank of Ireland will be allowed to authorise branches of non-EU banks in proposed amendments to the Central Bank (Supervision and Enforcement) Bill 2011.
Speaking on the changes at the FSI Annual Lunch Minister for Finance Michael Noonan said that there had already been 'strong interest' from non-EU banks in opening new businesses in Ireland on a branch basis.
In the November issue of Finance Dublin the financial regulator Matthew Elderfield speaking on the Central Bank's position toward non-EU banks setting up in Ireland on a branch basis indicated that the Central Bank had no principled objection towards such arrangements. Speaking at the time he said, 'I think you'd look at it case by case, and see about the home country supervision there and whether you'd feel comfortable with a particular business model...I wouldn't rule it out as a matter of absolute policy but you would have to look at it very carefully and decide whether or not you'd want to do it.'
The changes have been welcomed and will support efforts to attract investment says IDA Ireland's Kieran Donoghue. 'The International Financial Services Division in IDA has a global mandate. As a result, we are regularly engaged with Non EU and Non US institutions to assess their interest in using Ireland as a platform to serve a range of markets including the EU and EMEA,' he said. 'Following discussions with certain banking groups, it came to our attention that there was a legislative constraint around so-called 3rd country institutions establishing a branch in Ireland. In our view, it was important to remove this impediment to enable groups to at least consider a branch option and that this facility was part of our value proposition for Non EU institutions. We are pleased that our parent Department (Jobs, Enterprise and Innovation) and the Department of Finance have addressed the issue. It will support us in our efforts to win investment and jobs from certain companies and also from non-traditional markets. The issue now is to implement the initiative in a considered and prudent manner with due regard to our development strategy for the sector, regulatory and other requirements,' said Donoghue.
FIBI's Ali Ugur said that as the global banking environment settles opportunities to attract new banking business to Ireland will emerge. He said Ireland needs 'to tap more aggressively into North America, Asia, China, Japan and other global banking regions for replacement activity. These amendments will allow state bodies like the IDA Ireland, with which FIBI continues to engage on a constructive basis, to promote the IFSC and Ireland abroad in a more effective way and to attract new banking entities with associated employment and tax benefits to the State...if Ireland is to maintain its status as a global financial centre with both depth and breadth, we need a vibrant international banking sector at the heart of the IFSC.... FIBI and its member banks are fully committed to working with Government, the IDA and other key stakeholders in support of this important objective.'
The changes contained in the Bill enable the Central Bank to consider applications from non-EU credit institutions to operate in Ireland on a branch basis.
The prudential regulatory responsibility would rest with the home country, with the Central Bank taking responsibility for conduct of business regulation in Ireland. The amendment also contains a number of safeguards to ensure that regulatory and prudential standards and depositor protection in the bank's home country are equivalent to EU standards. |
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