A first for Ireland, and Europe
Late March saw Ireland host a transatlantic summit, the first in Europe to discuss the ongoing regulatory agenda behind the creation of greater trade in financial services between the EU and the USA, as SEC Commissioner Paul Atkins and his European counterpart Charlie McCreevy spoke at the Finance Dublin Conference. The occasion was a significant marker for Dublin's arrival as an international finance centre.
Atkins during his address praised Ireland's regulatory structure. He said 'Because of Ireland's growing importance in the global financial services market, it is critical that Ireland be a part of the global dialogue'. This tribute is also a welcome antidote to the misconception of Ireland as the 'Wild West' of financial services, as some have dubbed it in the past. Atkins comments were all the more significant on the back of a series of meetings held in March with top US regulators and the chairman and CEO of the Financial Regulator, who were able to point also to a recent IMF study of 32 countries which placed the Irish system in first place for accountability and independence.
SEPA looms ever closer
As the Basel Accord continues to get bedded down, the next major regulatory hurdle facing the banking sector is the creation of a Single Euro Payments Area (SEPA). The project, which is based on improving payment systems within the in the 25 EU member states, 3 EEA states (Iceland, Liechtenstein and Norway) and Switzerland, has been described as the biggest financial industry project ever undertaken, and it is expected to have a bigger impact on European businesses than the Y2K project or the introduction of euro notes and coins in 2002.
The origins of SEPA lie in the introduction of the euro in 1999, and the creation of a single market for financial services. Today, while countries across the Eurozone use the euro, payment systems rules, procedures, standards and technical systems still vary from country to country. So the aim of SEPA is to create a unified payments system across these countries.
In Ireland, the move is on amongst Irish banks, who are now embarking on the next stage of the project, which will involve the development of pan-European credit transfer and direct debit schemes for delivery on the 1st January, 2008. The Irish Payment Services Organisation (IPSO) is leading the effort, and it is working with the Government and regulators to provide a framework for delivery of the National Payments Strategy, and it has repeatedly called for commitment and engagement from all stakeholders to participate in the project.
A major step towards SEPA was reached on March 27th when ECOFIN reached an agreement on the compromise text for the Payment Services Directive (PSD), which will lay the legal foundation for SEPA.
While the end result of SEPA should be beneficial to retail banking customers in Europe - a payment between Dublin and Madrid will be able to be made as easily as one from Dublin to Mallow - there remains a lot of work to be done before this can be achieved.
Moreover, as payments become increasingly standardised and cheaper across Europe, competition for retail banking services will also increase, making SEPA a development banks need to watch very closely.
Deals of the Year
This issue also marks the second annual FINANCE 'Deals of the Year' awards, which recognise the depth and complexity of the deals being transacted in the Irish market and the role both the deal advisers and deal makers play in creating these deals. |
