Thursday, 1 April 2021
Department of Finance
Financial Services Sector
65. To ask the Minister for Finance the degree to which he continues to monitor activities in financial circles post-Brexit with a view to ensuring that financial services here are not in any way disadvantaged as a result of Brexit; and if he will make a statement on the matter. [17644/21]
My Department has been participating in whole of Government preparations for Brexit since before the UK referendum in 2016 and, in line with the Government’s overall approach, this work intensified during 2020 ahead of the end of the transition period.
My Department has been working closely with the Central Bank of Ireland and the National Treasury Management Agency (NTMA), through the Financial Stability Group, and through the Brexit Contact Group, to limit the impact of key identified risks in the Irish financial system and review progress on readiness planning. This work and engagement has sought to ensure that the sector is adequately prepared, and that financial services firms and market participants have contingency plans in place to cope with the possible effects of Brexit, with as little disruption for consumers, investors and markets as possible.On the basis of its work and engagement across the sector, the Central Bank has been able to assure me that the financial services sector is well prepared and resilient enough to manage the changes associated with Brexit.
Since the end of the transition period, my Department, the Central Bank of Ireland and the NTMA have been monitoring developments and activities in the financial sector and this monitoring will continue in accordance with their respective responsibilities.
The Deputy may be aware of the recent successful migration of Irish securities settlement, from the UK CREST system to Euroclear Bank Belgium. The UK decision to leave the EU precipitated the need to migrate the Irish system to an EU entity. This migration ensures that Ireland remains well connected into the heart of the EU’s capital markets - with the stable investment and legislative environment that comes with that access and activity.
In addition to the financial services provisions included in the EU-UK Trade and Cooperation Agreement, both the EU and the UK agreed to establish a Memorandum of Understanding on structured regulatory cooperation on financial services. This is currently being progressed and it is a welcome measure which will support continued cooperation between the EU and UK in financial services.
The nature, scale and complexity of Ireland’s international financial services sector will change in a number of ways as a result of the financial services firms relocating from the UK as a result of Brexit and those looking to set up operations in the EU for the first time. The industry in Ireland has become broader and more diverse with more firms carrying out a greater range of regulated activities than at any time.
The full impact of Brexit for Ireland’s international financial services sector may not materialise for some years. At present, firms are establishing the foundations of a new or significantly expanded presence in Ireland, creating a platform for future growth opportunities in all sectors: insurance, banking, and investment management.
A number of government strategies have sought to grow the international financial services sector over the last number of decades, and these strategies were in place long before Brexit. The latest iteration of these strategies is ‘Ireland for Finance, the strategy for the development of Ireland’s international financial services sector to 2025’.
The Government and various state agencies continue to implement that Strategy, (and indeed industry lead on some appropriate action measures under the annual action plans) and are working to fully capture any opportunities for inward investment that emerge through promoting Ireland’s strengths as a leading financial services centre.