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Monday, 26th February 2024
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To those who spend their working lives in financial services, and particularly in banking, the tone of speech made by the Minister for Finance at the launch of the Finance Dublin Yearbook 2000 was very welcome. Mr McCreevy set out how international financial services were becoming a key part of the internationally trading Irish economy.

The more a developmental outlook pervades financial services, and the finance and treasury function in corporates, the more the economy will benefit, the more secure jobs are, and the more high value-added those jobs will become. This is the common challenge across all finance. It cuts across the location of such finance services - from the traditional providers in banks and insurance companies, or now in increasingly sophisticated corporate treasury and finance functions, to the virtual world of pure-internet based financial services providers.

The lunchtime remarks of Ms Harney, the T?naiste, and those of Central Bank Governor Maurice O’Connell and Chairman of the Revenue Commissioners Dermot Quigley were equally welcome for their developmental outlook and for their candour in addressing the issues which were most on people’s minds. From regulation to taxation to the development of a strong legal and compliance culture, there is plenty of work to be done on all sides to make sure that the merging of what were once separate domestic and international services proceeds effectively.

Mr McCreevy also said in relation to the DIRT controversy that ‘the standards the public are entitled to expect were not adhered to in many financial institutions, and that was very disappointing.’ That sentiment will be viewed as entirely legitimate by people managing and working in financial services.

He added, ‘due process of law must be central in the resolution of the issue’, which suggests a view that while all due taxes must be paid, any rushed imposition of levies or punishment taxes should be avoided.

He also said, significantly, ‘I strongly believe that there is no place for a vindictive attitude to a key sector of the economy, as banks are, no matter what the immediate hue and cry at any time might suggest. However, we must move quickly to solve these issues and move on.’

Mr McCreevy’s sentiment is not frequently repeated in the media, nor by public representatives. Often it seems that the populist temptation to bash banks, insurers and professional advisers is not just succumbed to, but embraced passionately, at every possible opportunity. One could say it is simply a fact of life at this stage, but even critics of financial institutions ought to recognise that limiting the toolbox to a sledge hammer is not likely ever to be constructive.

Moving on, without any suggestion of avoiding responsibilities for past events, is the key task for the health of the economy and for people working in financial services.

There are a number of areas where a developmental approach can be implemented with immediate beneficial effect. For example, the development of Public Private Partnerships to accelerate the provision of much-needed infrastructure will succeed in delivering outputs only if a developmental approach is constantly to the fore - in both public and private sectors, of course. So far, the signs are that a commitment at political and administrative level in the public sector is translating to real progress. But is that progress fast enough? The urgency of the requirement for infrastructure means that time is of the essence. The term ‘fast-tracking’ is being used by the government in relation to the recently-published E-commerce Bill. This is welcome. But it should be made clear even to casual observers what fast-tracking means, and the same sense of urgency must be brought to infrastructure development with significant private sector involvement.

One could apply the same principle in other areas, such as the transition to a single regulatory authority for financial services. No reason has been offered as to why the issue cannot proceed to government decision, and any reason speculated upon in the media is without corroboration from the Ministers involved. Whatever the legitimate, but unexplained, reasons for the delay, the balance of advantage is surely for a decision now, and for that decision to be implemented quickly.

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