From London to Dublin... will it be boomtime for our financial services sector?
IRELAND’S financial sector could be heading for a post-Brexit boom, experts predicted last night.
With the UK set to leave the EU within two years, its centre as the financial services capital of the world could lead to an exodus from London to other capitals.
And as its nearest neighbour, Dublin could be in line for a hefty share of that income.
Economist David McWilliams said: ‘Americans will not stop investing in Europe, via the two Englishspeaking countries in Europe just because Britain has said politically we’re out of the EU.
‘So I suspect, we could have a huge opportunity here to actually garner a percentage of that diverted capital and income to Ireland.‘
According to the Financial Times in 2014, Irish companies and State bodies have been ‘hard-selling’ Dublin as a home for financial institutions post Brexit for years.
The paper reported that a number of Wall Street banks were at the time drawing up preliminary plans to move some of their London-based activities to Ireland in the event of a Brexit.
And they cited such organisations as Bank of America, Citigroup and Morgan Stanley.
‘I’m frankly looking at moving some activities to Ireland,’ senior UK-based manager at a Wall Street bank was quoted as telling the Financial Times.
‘I think the Irish Central Bank and Government would welcome this. It is not so much Brexit, more about legal entity optimisation.’
The European operations of most US and Asian banks are based in the UK, which is home to more than 250 foreign banks, because it gives them automatic ‘passport’ rights to operate across the EU.
The UK’s Brexit could see those so-called ‘passporting rights’ slip from the hands of UK-based financial institutions into those of its EU neighbours, like Ireland.
The day before he knew the result Brexit vote, Morgan Stanley Irish president Colm Kelleher said that in the event of a Leave, the bank might ‘possibly, possibly’ consider moving its EU HQ to Dublin.
When asked on Bloomberg TV on Wednesday what Morgan Stanley will do differently after the Brexit vote, he said: ‘Assuming there is a Brexit, we have contingency plans. We will talk with our regulators, we will look at having a European headquarters somewhere in Europe that will be acceptable to Morgan Stanley and to our regulators.’
When asked ‘where would that be?’, he replied: ‘Possibly, possibly – we haven’t made a decision – Dublin or Frankfurt.’ And he added: ‘I like the idea of Dublin.’
Also reviewing matters is the American Chamber of Commerce Ireland.
Speaking following the result of the Brexit referendum in the UK, CEO Mark Redmond said the result will have ‘a significant impact on Ireland’.
He said: ‘While it is important to note that no changes are imminent it is vital that all necessary reassurances are provided that the EU remains a great place for inward investment and job creation. This is of particular importance when it comes to the EU’s largest trading partner – the United States. Ireland is the gateway to Europe to over 700 US companies who employ over 140,000 people. One of the key attractions has always been access to the markets of the European Union.
‘US companies employ 4.3million people across the EU. The priority now must be to maintain certainty for these companies and to ensure the EU-US relationship remains as strong as ever.’
He added: ‘The result underlines the importance of Ireland’s role within the EU and within EU-US relations and the Government here must continue to play a constructive role in the forthcoming negotiations.’
Mariano Mamertino, EMEA Economist at online jobs search site, said Ireland will be the only English-speaking EU member with the fastest growth rate and flexible labour markets. He said: ‘Sectors like technology, pharmaceuticals and financial services would benefit from a larger pool of available candidates for whom a UK outside the EU might be less accessible or less attractive.’