The IFSC is a success story for Ireland, and for an innovative, committed approach to policy by successive Irish Governments.
It is an example of public and private sectors working together with international and Irish industry to achieve what many people would have thought as impossible: a leading European financial centre created out of nothing, in a once run-down part of Dublin.
In Ireland, we have shed a lot of the self-doubt and bad policies that held us back for decades. And the IFSC has been both a catalyst for that change and a result of it.
The statistics are very impressive:
• 9,000 people employed in over 450 companies
• funds managed at •213 billion
• bank assets at approximately •170 billion
• half of the world’s top fifty banks with operations in Dublin
This is a great achievement, an achievement of your companies and of your hard work. As always, however, we can never rest on our laurels, no matter how deserving or illustrious they might be. So, I would like to take a few moments now to talk about just some of the challenges ahead.
Challenges
First, the international policy environment and Ireland’s place within it. Yesterday, there was some straight talking from your speakers about tax policy internationally and in the European Union. I found those remarks very interesting and challenging.
Let me add this comment: I am optimistic for Ireland and the IFSC. The liberal, pro-competition, open market political outlook is present in the European Union, in the liberal democratic grouping. EU Commissioner Frits Bolkestein, who is in charge of the critical Single Market programme and influences many areas of micro-economic reform, is a Dutch liberal and a strong advocate for the liberal, free market point of view.
I believe the agenda of market reform signed up by the Member States at the Lisbon summit last year, and reaffirmed in Stockholm last weekend, is the basis for the future development of an enterprise economy for the EU as a whole.
At Stockholm there was an important development for the financial services industry: the creation of new structures to develop EU financial regulation of securities markets. I hope that the implementation of the Lamfalussy report will mean a fast-track approach to financial regulation in the EU, one that facilitates the development of strong, pan-European financial services, based in many cases in Dublin, of course.
It is important that we continue to develop and press the liberal democratic point of view, the one that I believe serves Ireland, Europe and its citizens best.
In Ireland, we must press the case for an open, liberal Europe that has a low burden of tax and regulation on enterprise because that is the best way to secure employment and prosperity. That is what we are implementing in Ireland.
It is also my priority in Europe. We should not detach ourselves from Europe, but promote our policies for the best way forward for all of Europe and Ireland within it. It is entirely consistent that we should maintain and safeguard our fiscal independence, for that is what the Member States of the Union have collectively agreed.
The forthcoming referendum on the Nice Treaty, which the Government decided to hold, offers us a chance to reaffirm our conviction that an enlarged European Union is better for the people of the continent and also in Ireland’s interests.
I believe it will be clear to your businesses in the IFSC that a wider Single Market and enlargement of the European Union is an opportunity to be grasped.
How many international financial services businesses would be here if we were not fully part of the Union? How many would have come, stayed and developed here if we had not brought EU financial services directives into national law with alacrity and operated them with flexibility?
I would encourage each of you who are citizens to support the Nice referendum and, as businesses, to make your voices heard also. This is the big picture - equally, perhaps more, important for your strategic business development as the details of one draft Directive or another, which I know you scrutinise very closely.
Single Regulator
Here in Ireland the Government has recently taken a major step in reforming the way financial services is regulated. We have also put in place new measures to strengthen corporate enforcement. I know that all of you will have followed the details quite closely.
We must hold to the highest standards of regulation and compliance, in public and private sectors, and to our highest ambitions for the development of international financial services.
The new Office of the Director of Corporate Enforcement is part of the compliance infrastructure of a modern, open, fair economy. For too long, compliance with company law was very poor in Ireland and we have seen the harmful effects of this attitude. A compliance culture and strong enforcement is not just in the wider public interest. It is also a matter of fairness to those businesses which take their compliance duties seriously. It prevents free-riding on the compliance of good companies by unscrupulous business, effectively, that is, cheating. IFSC businesses will be particularly conscious of this, given the history of the problem of Irish Registered Non-Resident Companies, which we have also dealt with now.
The legislation to set up this Office is currently going through the D?il and I expect that it will be enacted before the summer recess.
As regards the new regulatory structure, the elements of the structure are clear. There are two independent pillars: one, the regulator (Irish Financial Services Regulatory Authority or IFSRA) and the other, the monetary policy pillar, the Irish Monetary Authority. These are linked for important reasons through a board of the Central Bank of Ireland Financial Services Authority.
For most of you, your dealings will be with the regulator, IFSRA. I know that you are much more interested in what it will do, how it will implement regulation and how it will be responsive, rather than institutional arrangements. This is a critical point in financial services regulation in Ireland. The Government wants the new regulator to be responsive to both industry business needs and consumer needs. We are giving it the independence to achieve this.
IFSRA will have
• a new board with 10 people
• an independent Chairman
• its own Chief Executive
• a Customer Protection Director
• the ability to determine the number of it staff and their terms and conditions.
This is a great opportunity for all involved at the next phase of financial services in Ireland at the start of the 21st century.
The most important thing in the new regulatory regime will be its people, at the leadership level especially, but also throughout the whole structure.
An interim board of the new regulator will soon be appointed. We expect this board to drive forward the process. Implementing legislation is being prepared in the Department of Finance and with my officials, with the help also of the solicitors, A&L Goodbody, whom the Minister for Finance appointed yesterday.
One of the first tasks of the new Board will be to organise the appointment of a Chief Executive. I am sure the board will share our view that we will be looking for people
• with real flair for development,
• advocates and champions for the public interest
• accessible and clear communicators;
• who are able to inspire and lead an organisation of professional public servants
• who are able to work effectively with the people in the other parts of the new structure.
It will be an exciting challenge. I would encourage people who would relish the challenge to apply, people from both public and private sectors, at home and abroad.
The first phase of the IFSC is over, with the ending of the 10 per cent tax regime. Now we are into new territory. We must remain resolute, ambitious and optimistic in addressing our shared challenges ahead, in the interests of Ireland and of all who would work, live and do business here.
Remarks by Mary Harney, T?naiste and Minister for Enterprise, Trade and Employment at the Finance Dublin Annual Conference Lunch on Wednesday 28th March 2001 in the Burlington Hotel, Dublin. |
