| The Global Financial Centres Conference in Dublin |
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Over half of the world's financial centres were represented and analysed at the inaugural financial services conference organised by Fintel on June 16th and 17th 2008.
The conference was addressed by over 40 speakers from financial centres, and global regulatory bodies, including Commissioner McCreevy of the EU, Commissioner Paul Atkins of the United States Securities & Exchange Commission, and Jeffrey Owens, of the OECD. Key sponsors included major accounting firms, PWC and Ernst & Young, and among the banks and financial institutions sponsoring were HSBC, Northern Trust & BNY Mellon. |
The conference was addressed by over 40 speakers from financial centres, and global regulatory bodies, including Commissioner McCreevy of the EU, Commissioner Paul Atkins of the United States Securities & Exchange Commission, and Jeffrey Owens, of the OECD. Key sponsors included major accounting firms, PWC and Ernst & Young, and among the banks and financial institutions sponsoring were HSBC, Northern Trust & BNY Mellon.
The conference covered over 50 different centres with coverage ranging from detailed presentations on individual centres, and expert commentary from a gathering of the world’s leading authorities on financial centres and their marketing. Key themes, such as the battle between London and New York for global dominance, and the significance and rise of emerging financial centres in Asia, and the Middle East, as well as regional focuses on Europe, the British offshore centres, Hispanic centres, and, given the location of the conference in the historic Royal Hospital Kilmainham, on the island of Ireland.  | | Commissioner McCreevy announces the EU’s Intention to regulate credit rating agencies, with (seated l-r), Prof Michael Mainelli, and conference chair on Day 1, Patrick Young. |
Ireland, north and south, as well as regional centres such as Limerick and Shannon, and specific sector focuses in Ireland, such as insurance, funds, and aviation finance, and pan European pensions were highlights of the conference.
The chief executives of IDA Ireland, and Invest Northern Ireland, Barry O'Leary, and Leslie Morrison addressed the conferences in thoughtful and original presentations that underscored the continued vigour of Ireland as a location for financial services, both north and south, and left delegates in no doubt as to the very bright future there is for financial services in Ireland, irrespective of the temporary concerns arising from the credit crunch.
Throughout the two days of the conference, the role and importance of niches and clusters was made evident - the concept of financial centres competition as not being a zero sum game, but a complementary game in which centres developed areas of specialism and expertise was evident. Ireland’s clusters gained full expression, and new areas of endeavour, such as in life assurance were mapped out.
Ireland's particular agenda was addressed in two sessions - involving a think tank approach by sector representatives chaired by Padraig Rushe, chair of the IFSC Clearing House Group on banking and treasury, and also chair of Day 2 of the conference. This included Gerry Brady, CEO of Northern Trust in Ireland, Mark Fitzgerald, COO of Citibank Europe and Frank Monks of Nexgen providing a critical overview of issues, including a plea from Frank Monks for a renewal of Ireland’s attractions through reform on the personal tax front.
Because of the persistence of high personal tax rates (over 40 p.c. at the marginal level) compared with 20 p.c. and less in key competing centres, including Switzerland, and Singapore, it is not true that Ireland is a low tax centre, he said. While certainly, Ireland’s pre-eminent position as a low corporate tax centre continues to be well recognised around the world (and the very existence of corporation tax as a valid tax came in for criticism – for example from Merrill Lynch’s global head of tax, Mike Gaffney, (an American, who, nevertheless has the distinction of playing Gaelic football at representative level, in Croke Park, Dublin, for New York).
A new global benchmark for financial centres, has come into being, in the past two years in the form of the increasingly influential GFCI. This was developed by Michael Mainelli, of Z Yen, which is independently sponsored by the City of London Corporation.
Mainellli, who received part of his education in Ireland, at secondary school, and at TCD, and who worked in Dublin for a number of years in the late 1970s (he was, he says, one of the IDA generation, who emigrated in the 1980s, recalling a famous IDA international advertisement of the 1980s), pinpointed Dublin’s rise up the ranks in the GFCI Index to 13th position, according to the latest survey, published in March 2008.
Mainelli chaired a session, addressed by Sandra Boss, lead partner of McKinsey, in the New York, report commissioned last year by NY Mayor Bloomberg, and Democratic senator, Charles Schumer, and including speakers such as Keith Boyfield, and Mike Gaffney, global head of taxation of Merrill Lynch.
Mainelli asked his panel to identify one centre that they thought would lead. All were in Asia, and or Middle East, underscoring the definite reality in the conference that the money flows, and the action in international finance has shifted eastwards for the time being.
New York, as a credit centre was bearing the brunt of the global credit writedowns, and inescapably will have been hit additionally to the problems already identified in the Bloomberg report last year, for example, regulatory indigestion, and the hangover from Sarbanes Oxley. But London was undergoing problems too, such as the “non doms” issue, and corporation
tax problems.
The rise of Middle East centres was analysed by Jane Dellar, managing director of Bahrain financial Services Economic Development Board, who in a presentation said that the Gulf Cooperation Council countries now accounted for a bigger current account surplus than China.
Singapore, Hong Kong, and Shanghai were compared by the expert panel , and the conclusion was made that a lot would depend on how the Chinese Government played the role of Hong Kong versus, Shanghai, and Beijing, an outcome that in turn would affect the role of Singapore as a pre-eminent Asian centre.
Delegates were advised to watch for other rising Asian centres, too, such as Vietnam, Malaysia, Mumbai, and, Mainelli’s own personal nomination, Djakarta.
Europe’s financial centres future was analysed in detailed panel discussions, as was the role of offshore British centres, Jersey, Guernsey, and Isle of Man, respectively. Delegates heard of the channel islands’ offerings in funds, notably Jersey’s new unregulated offering and in the case of Isle of Man the island’s niche offerings, such as domicilation of Indian corporate listings on the London Stock Exchange. | | (l-r) Enrique Prados Del Amo, President, Asocación de Mercados Financieros, Madrid financial centre; Jeffrey Owens, Head of Centre for Tax Policy and Administration, OECD; Professor Michael Mainelli, Executive Chairman, Z/Yen; Akkie Lansbergen, Managing Director, Holland Financial Centre; Charlie McCreevy, Commissioner for the Internal Market, European Commission; Paul S. Atkins, Commissioner, Securities and Exchange Commission; Patrick L Young, Author of Capital Market Revolution and New Capital Market Revolution |
The role of exchanges in various centres was led by exchanges expert Patrick Young, who acted as overall chairman of the first day of the conference. The role and importance of exchanges to financial centres was discussed, and the Isle of Man, for example was shown to have developed a very successful niche approach, despite its lack of a Stock Exchange, unlike Jersey, Guernsey and Ireland.
The conference heard a no holds barred anaysis of the credit crisis from head of treasury at BNP Paribas Dublin, John Coffey, who also predicted that despite a bottoming out and recovery of the US dollar, that the resolution of the credit crisis would be protracted.
The role of the credit crisis came center stage naturally, and the impact on New York in particular was emphasised. However, other centres such as London and Paris have not escaped, and the impact there was also assessed.
The two keynote speeches by Commissioner for the internal market, Charlie McCreevy, and Commissioner Atkins heard major announcements on the regulation of credit rating agencies, whose role in the credit crisis came under scrutiny at the conference, for example in Coffey’s paper.
Commissioner McCreevy announced that the EU had decided to regulate the credit rating agencies, an announcement that was picked up immeditately in the global media, with articles in all major global news channels arising from McCreevy’s conference speech.
In an exclusive interview with the editor of Finance subsequent to the conference (see Finance, July) Commissioner paul Atkins, who also spoke at the conference, said that the US Securities and Exchange Commission would closely monitor developments in Europe, subsequent to Commissioner McCreevy’s announcement. In the meantime, the SEC had decided on an approach that would reduce reliance on the opinions of credit rating agencies in US regulatory requirements.
Aside from regulation, taxation was covered, including in an adress to the conference by Jeffrey Owens, the head of the OECD’s taxation body, which has the mandate for developing the global policy for member states on tax havens, and tax competition, a subject close to Ireland’s vital international economic interests.
Day two of the conference heard overviews, and discussions on a number of Irish leading international sectors, including: Funds, with presentations from HSBC, Northern Trust, Mercer, and John Bohan, MD of new Midleton fund administration company Apex.
Proceedings were opened in a keynote address on the Government’s policy for the Irish international financial services industry, by the Minister for Finance, Brian Lenihan.
Also speaking at the conference from an Irish official perspective was the CEO of the Financial Regulator, Patrick Neary, and the CEO of IDA Ireland, Barry O’Leary. The conference was also attended by the Governor of the Central Bank, the head of the Commission of Taxation, Frank Daly, and the chairman of the Industry Consultative panel of the Financial Regulator, James Deeny.
Aviation finance was also comprehensively covered, in a panel comprising Damon D’Agostino, of CIT Aerospace International, John Leenane, Orix Aviation Systems, James Cottle, CEO, Airbus Financial Services, and Kevin Humphreys, director, safety regulation, Irish Aviation Authority.
There was a Pan European pensions update by Martin Jack, managing director Northern Trust Global Advisers, and a presentation predicting the future prospects and areas of opportunity for the IFSC life assurance sector, by Mike Claffey of
Life Strategies.
The 2009 conference is in preparation and already delegates and speakers are lining up for the event (details of which are on the conference website, to be found at www.FinanceCentresInternational.com, and www.financedublin.com, and www.finance-magazine.com. |
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| Article appeared in the August 2008 issue.
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