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Thursday, 18th April 2024
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Industry calls for balanced regulation Back  
There are concerns from the financial services industry that the new regulator will overemphasis the importance of the consumer and will fetter the wholesale sector.
Industry leaders raised their concerns about the proposed structure of the Irish Financial Services Regulatory Authority at the second annual Finance Dublin Conference.

The international financial services industry called for the Government to not focus too heavily on the consumer aspects of the newly proposed Irish Financial Regulatory Services Authority.
The issue was raised by delegates at the Finance Dublin conference held in the Burlington Hotel at the end of March.

Managing director of the Financial Services Industry Association Torlach Denihan said that the wholesale industry was concerned of the possible knock-on effect of an over emphasis on the consumer, given that this side of the industry does not deal with the retail end of the market. He was worried of the emphasis on the retail market would cut across and have a negative impact on the wholesale international financial services community. Denihan added that the main focus of the new structure should go towards creating a proper prudential regulation environment rather than on consumer protection because he said the ultimate concern of the consumer is default on their money.

Speaking at the conference, second secretary general to the Department of Finance, Noel T O’Gorman, addressed these concerns by saying that the Government was cognisant of the industry’s concerns. However he added that history had shown that there needed to be a focus on consumer issues within financial services. He said the this would be addressed by the creation of a Statutory Ombudsman covering the entire financial sector.

O’Gorman said ‘the Government is aware of the fear that the protection of the individual consumer could cut across the wider sector, but the industry has in some respects fallen down in how they have served the consumer and there are legitimate issues there to be addressed.’
Chairman of the conference William Slattery, global head of risk management at Deutsche International in London, said the challenge to all of those involved and particularly to the Government was to create a structure which had an even-handed approach.

Slattery said ‘the most important test in setting up the new regulatory structure is to strike a balance between direct consumer regulation, which might transmit itself into the international sector as well, and coherent industry regulation.’

Turning to the issue of funding of the body, another hot topic amongst delegates at the conference, O’Gorman said that it was clear that the industry will have to contribute but that it was important that this was carried out in a fair manner. Details of funding for the regulatory body have not yet been finalised.

O’Gorman also confirmed that the Government hoped to appoint the interim board to oversee the setting up of the regulatory body very shortly.

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