Ms Mary-Elizabeth McMunn:

I thank Dr. Fagan. I thank the Chairman and Senators for their questions. I will group a number of questions together as they are variations on a theme.

I will deal with the position around conservatism and the questions on the other jurisdiction in terms of attracting their share of financial services companies.

From our perspective, we are very conscious of the potential for companies to move to Ireland as a result of Brexit. As we have outlined in our opening statement, however, we do not have a role in attracting businesses to Ireland. That promotional role has been explicitly removed from our mandate because it was felt that it compromised our authorisation and supervisory stance.

Let me take a step back. Central to the concern from our perspective is implementing our mandate, which is about financial stability, the protection of customers and that there is a well-functioning and well-regulated financial system. For any authorisation process, one must think in terms of where one is starting from. We are starting from an understanding of what is the business that is being presented to us; what are the risks associated with that business and how those risks are managed and mitigated. Our starting point is not what is the most conservative position we can adopt in respect of this applicant firm. It is about understanding the risks of that particular business. We also seek to ensure that customers are very central to the business proposition. From a financial stability perspective, we would stand back and ask what would be the potential harm to the citizens, to the economy and so on were this firm to fail. From that perspective, the Governor mentioned at our press conference on the annual report yesterday that it was his ambition that regulatory issues would not play a role in decisions around relocation. Many different factors go into influencing the relocation of a firm to a particular jurisdiction and I can go into those. We are not proposing to comment on individual firms' specific relocation decisions to various different jurisdictions because as I said, a range of factors influence where firms chose to locate.

When we look at supervision, the EU has a harmonised approach to regulation of financial services and our approach to authorisation is firmly embedded in the European system of financial supervision. What is important from our perspective is that regulatory authorities ensure that any migration of those firms does not lead to any disjointed or fragmented supervisory system. Regardless of where an entity seeks to locate, firms should expect a rigorous application of both authorisation standards and ongoing supervision. We are actively engaged at a European level with our colleagues in the ECB and in the other supervisory authorities to ensure that UK firms' Brexit-related decisions reflect a consistent approach across the EU. We have referred in our opening statement to some guidelines that have been issued by the ECB recently with regard to frequently asked questions, FAQs, about what one should expect in the context of a bank, for example, relocating to the euro area. It also sets out supervisory expectations on a number of key issues and we are very supportive of that. Other European authorities are moving in the same way.

I will deal with Senator Paul Daly's point on specifically taking away the focus from existing areas. There is a significant ongoing effort across the organisation on Brexit-related activity. We also continue to fulfil our mandate and I will speak specifically to supervision from an ongoing supervisory perspective. We are not taking the focus off our existing mandate in respect of ongoing supervision, intrusive supervision, enforcement and so on. While we have an incumbent population for which we need to seek to do our job, perhaps specifically in the context of the authorisation processes and the Chairman's direction on time, the most important perspective from our side is that we are keen to be very transparent about the process. We regulate more than 10,000 financial services providers in Ireland. We have alluded to the sectors in our opening statement. The nature of any application is very particular to the type of entity that is presenting itself. That flows directly through to the timeline around authorisation.

For example, while the principles of our authorisation and gateway roles are the same, their practical implementation is very particular to the type of application on the table. If, for example, we were considering a qualifying investor fund, the authorisation could be turned around in a matter of days. A banking licence, however, is an entirely different proposition and the SSM regulations speak to at least six months in the context of turning around a banking application but a decision must be made within a year.

We publish six-monthly reports on our regulatory performance against standards we set for ourselves regarding authorisation timelines so we measure ourselves against timeliness standards. This outlines not only the number of applications that are live, but also how we have performed against our own protocols for meeting them. The last report in this regard was published in February. It dealt with the period from July to December last year. The next report is due in the summer and will cover the period from January to July. Regarding authorisation, it is important to say that our goal is to be engaged, open and pragmatic and that it is a rigorous process with the firm. However, as we recognise, particularly for complex applications, that firms may need some help, we have a pre-application process whereby we engage with institutions to give them some assistance. As for what a completed application might look like and what might be the key areas one might need to address, without trying to evade the question, it is very difficult to give an indication as to the time it takes to authorise a firm because it is very particular to the type of authorisation with which one is dealing.

We have received a large number of inquiries since the referendum and they have been pretty steady. What we are starting to see with that pipeline activity is that it is migrating as Article 50 has been triggered but also as firms are starting to narrow down their own options and make decisions about possible relocation choices. We expect much of that activity to take place over the rest of 2017. The difficulty - and the Governor mentioned this yesterday - is that when one talks about numbers of inquiries, some are very marginal in nature and some require quite extensive engagement with us. Both cases are represented as a single number so it is often not useful to talk about the number of inquiries in that regard. In addition, as I think alluded to by one of the Senators, many firms are making inquiries across a number of jurisdictions at the same time and there are reasons for not pursuing an inquiry further. In some cases we do not know and, in others, it can be just as the firm gets a clearer understanding of the implications of Brexit for its own strategic planning. There can also be some of the additional factors - infrastructure, culture, language - that are outside of regulation and supervision. What we can say is that we are engaged with firms at all stages through that process and we have been very open to doing so. In addition, we will publish the number of applications. They will come through in the summer because they will be linked to our performance against the standards. However, there could be a number of institutions that might reflect a small amount of financial services activity. There could be one application that is very significant in terms of its financial services presence, so again, there is the difficulty in outlining a few numbers. However, to return to one of the Senator's other questions, we do expect, given our engagement with those firms, that a good proportion of those will come through to actual live applications. It is very difficult at this stage to be definitive about what that proportion is for some of the factors as outlined but also because many of the firms have not made decisions at this point in time. However, given our engagement with the firms, it seems likely they will translate into live applications.