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Reflections: ’87-’02 - 15 Years of Finance Back  
Leading figures in Ireland’s financial services sector look back on the past fifteen years and give their predictions for the future.
David Went, group chief executive, Irish Life & Permanent plc.
Looking back over the past 15 years I’m struck with two thoughts. Firstly - how much we’ve matured as a country and an economy. The growth of confidence and ambition in Ireland over those years is astounding - and it has impacted on us all in a very positive way.
Secondly I’m struck by how much change there has been in the financial services sector in particular. Even if you look at our own group, the Irish Life & Permanent Group is built on three key businesses - Irish Life, Irish Permanent and TSB Bank (the latter two are now being merged to create permanent tsb). Fifteen years ago, none of these institutions had even begun the journey that would eventually see them come together. Irish Life had yet to be privatised, Irish Permanent was still a building society and TSB Bank had not even been formed (the merger of the Cork and Limerick Savings Bank on the one hand and the Trustee Savings’ Bank on the other only occurred in 1992).
Its only when you pause to look back that you appreciate how far you’ve come.

Tom Foley, executive director, IIB Bank
It may seem clich?d, but the only constant over the past fifteen years has been change. Most notable has been the surge in confidence of Irish business and indeed the nation as a whole. Gone, thankfully, are the gloomy pessimistic 80s. If we remember painful lessons and retain confidence, we will overcome current challenges and build on the gains of the recent boom.
The Irish financial sector has changed dramatically to blend the best of international and Irish practices. In IIB Bank, we have grown and consistently diversified. We now draw on the best products available worldwide through our international parent, KBC, and distil these to meet the changing requirements of an increasingly successful and demanding customer base.
Going forward, strengthening our global reach will be critical to sustaining success. We must foster new ideas and face new competitors more likely to come from the four corners of the globe as this small island. In reaching out we must also ensure that we remain in touch and relevant to the Irish market.

John Keilthy, group chief operating officer, NCB Stockbrokers
The Irish stockbroking industry has transformed itself over the past 15 years. Many of the firms that featured in Finance Magazine’s first issue back in 1987 have changed ownership with the largest, including NCB, being acquired by banks. Some other firms have merged while, regrettably, a few have failed. Notwithstanding the challenge and excitement of the intervening years, NCB has remained true to the guiding principles upon which the firm was founded.
In the June 1987 issue of Finance Magazine, NCB won the largest number of individual categories in the first survey of Irish stockbrokers. The key to our success then, as it is today, was the quality of the people working for the firm. While many of the faces in NCB have changed in the interval, the commitment to employing the best people has remained the key goal throughout, culminating in NCB being awarded the largest number of category wins in Finance Magazine’s 2001 stockbroking survey.
As with Finance Magazine, 2002 is also a special year for NCB as it marks our 21st birthday. As we look forward to the future with confidence a focus on people, research and technology remains the cornerstone of our philosophy.

Philip Halpin, management specialist at IMI
The fifteen-year period since the launch of the first issue of Finance magazine has been truly historic. Who then could have foreseen such events as the break up of the USSR, the reunification of Germany, the Gulf war, the currency crisis, the reform of Irish public finances and unprecedented economic growth.
I believe that the tough stance taken by the Irish authorities and not panicking into a premature devaluation of the punt during the currency crisis was of fundamental importance in shaping the unprecedented prosperity we have experienced in recent years.
This stance resulted in German style interest rates, which in my view has been our engine of growth. The financial services industry has undergone unprecedented change. And consolidation has been the order of the day both domestically and internationally.
This trend will continue, primarily driven by developments in Europe. The quality of a domestic institutions strategy, its leadership and capability to implement change will be the key determinants of future growth. Expansion into the euro area is as of yet an unexploited opportunity and should emerge as an alternative means of achieving required scale.
Tom Healy, chief executive of the Irish Stock Exchange
Finance was launched in June 87, and the world stock markets crashed within four months! But time is a great healer, and we have forgiven Ken O’Brien for this long ago. The Irish stock Exchange was a very different business in 1987 and technology was just beginning to show itself. A few comparisons:
• In ’87, business was largely conducted on the traditional market floor; now, trading is totally electronic, using the world-class Xetra system.
• In ’87, settlement was completely paper-based; we now use CREST, also a world-leader in its field.
• In ’87, the Irish Stock Exchange had no specialised niche businesses; we are now the acknowledged world leader in the listing of international investment funds and certain specialist debt securities.
• On the other hand, we had no telecoms company on the Irish market in ’87. Plus ca change!
Finally, congratulations to Ken and his team in Finance. Fifteen years is a long successful run in the magazine business.

Paul McGowan, chairman of the taxation group in KMPG
On reflecting on developments over the last 15 years in the context of my work and the industry, which I serve, three particular trends stand out.
Firstly, rationalisation and globalisation, which has impacted the financial sector more acutely than others. The profile of our client base changes constantly for reasons totally outside our control. Even in my own service area the number of global firms have halved during that period.
Secondly, increased regulation in every field has increased the complexity of advising on business transactions. The interaction of legal, taxation and accounting constraints requires careful management.
And finally, the national imperative to drive the IFSC forward in its early days gave birth to a new level of co-operation between the public and private sector which was particularly evident in the area of taxation. The subtle changes in the relationship between Revenue and tax advisors has been of significant benefit to the industry and the companies that operate in it.

Ronan O’Connor, head of risk management, NTMA
The greatest single impact on the financial services industry has been in the area of technology. This is evident in the plethora of products now being offered at the retail level, but much more so behind the scenes. A previous employer in 1987 spent several million dollars on a state of the art market information system, which had less functionality than I currently have available on my networked personal computer. Powerful risk engines now exist to perform analysis, which would have been impossible 15 years ago. If only the resulting decisions had become correspondingly easier!!

Peter Blessing, director of Corporate Finance Ireland
Somebody once said that ‘the past is another country’. Viewed across a 15-year gap, this can certainly be said of the financial services industry. I well remember thinking Ken O’Brien was very brave (or perhaps worse!) setting up Finance in a time when the IFSC was little more than a dream.
To me the biggest change, since 1987 and one which I see continuing, is the reduced fear of failure. There is an increasing willingness to try new things either as boutique operations or even within larger organisations. There was very little of this in the mid 1980s.
So perhaps, without realising it, Ken was a pioneer when he set out on his journey all those years ago!

Brendan Logue, head of financial services division, IDA Ireland
The IFSC was launched 15 years ago and I’ve spent 13 of those years working on its development and promotion. I was once asked by a journalist from The Economist whether a master plan existed for the centre and somewhat caught on the hop, I said that it was being developed by a process of ‘dynamic research’ - a phrase I had heard a colleague use earlier to some effect. However I added (somewhat injudiciously) that this was just another way of saying ‘we made it up as we went along’! This was reported in The Economist article - but with a positive slant - attracting a fair bit of good humoured ragging in my direction.
As for the future of the IFSC I think it is exceptionally bright but I think we will need to maintain and probably enhance the ‘dynamic research’ process to ensure the quality and competitiveness of the four cornerstones of the centre - people, taxation, regulation and infrastructure. I think if we avoid the temptation to rest on our laurels regarding these, the future will be very bright indeed.

And, way back then… Bertie Ahern
Bertie Ahern, speaking to Finance in June 1994 as Minister for Finance, said of the currency crisis at the time, ‘we learned a lot of lessons from the currency crisis - and certainly I did. One of these is that there has been too much left to the Central Bank in matters of the exchange rate in the past, and as a result we have now set up an exchange rate policy unit in the Department here, which I intend will have far greater input into the process. Of course, the new Governor of the Central Bank, Maurice O’Connell, was one of my key advisors during the currency crisis.’

Dermot Desmond
Writing on futures and options for Finance in July 1987 as managing director of NCB, Desmond said, ‘Neither futures nor options are currently available in Irish capital markets but, if Ireland is to play its full role in the global markets of the future, it is essential that these new financial instruments be developed and used by market participants.’

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