We could gain as banks f lee the UK
IDA conf irms it’s been in talks with British f irms for several months
BRITISH-BASeD banks and other companies have been eyeing up a move to Ireland for months out of concern over a possible Brexit, it has emerged.
london’s financial centre – the City – is facing as many as 100,000 job losses amid fears that the UK’s dramatic vote to quit the eU will force banks to shift business out of london to Frankfurt, Dublin and other locations. leading bankers fear that london’s glory days as a financial centre are behind it.
Now IDA chief executive Martin Shanahan has confirmed that the IDA had been consulted even before this week’s referendum. He said: ‘They approached us.’
Mr Shanahan said that discussions with potential clients who may wish to relocate to Ireland from the UK following a Brexit vote have been taking place for months and formal discussions could begin as soon as next week.
However, the IDA maintains that a ‘Remain’ vote would have benefited Ireland more.
Mr Shanahan said on Friday: ‘While not what we had hoped for, the situation may present opportunity for Ireland in attracting foreign direct investment. Ireland will remain a member of the european Union with full market access and that will be attractive to investors.
‘IDA Ireland’s view throughout this period has been that Ireland would benefit overall from the UK remaining a member of the eU.
‘However, now that there is certainty on the result, IDA Ireland will liaise directly with its 1,200-plus client companies and potential investors over the coming weeks to work with them on the implications of the vote.’
In March, the Central Bank of Ireland began preparing for an influx of investment funds.
Research from the economic and Social Research Institute published earlier this month suggested Ireland could stand to benefit from Brexit. The eSRI’s paper found this was particularly so in the case of investments from outside the eU.
International asset management companies are expected to be the first financial services groups to shift operations to Ireland.
M&G Investments, the £246.1bn UK-based asset manager, has already indicated that it is either considering a move or is in the process of boosting its presence in Dublin, according to reports in the Financial Times.
Several institutions are rumoured to be considering moving, but their intended destinations are not clear.
Morgan Stanley denied a report on Friday that it was moving 2,000 staff – but sources close to the bank admitted there is already a plan to move up to 1,000 jobs out of Britain.
JP Morgan has said Brexit could see it move up to 4,000 roles but will not quit london, while HSBC has said it could move another 1,000 and Goldman Sachs has said it will shift jobs to Frankfurt.
In a symbolic blow to london’s status as europe’s financial capital, the continent-wide financial regulator, the european Banking Authority, which employs 160 people at Canary Wharf, has said it will have to move.
One senior london trader said: ‘An all-staff email was sent out this morning telling us that since the Brexit result the company may face some big decisions ahead but for now it would be business as usual.’
Xavier Rolet, chief executive of the london Stock exchange, warned in the lead-up to the referendum that 100,000 jobs could go.
Alan Greenspan, former chairman of the US Federal Reserve, told the BBC: ‘The focus is going to shift to other areas of economic union: Frankfurt, Paris, or what have you.’
Thousands of jobs in Britain’s €8bn pharmaceutical industry could also be wiped out because of the vote to leave the eU, industry sources told the MoS this weekend. The IDA’s Martin Shanahan pointed out that ‘the exact implications of the result would not be known for some time, and IDA Ireland would take stock of developments as clarity emerges’. He said: ‘Ireland’s proposition to investors will continue to resonate. Our deep and varied talent pool, competitive tax regime and long track record of working with foreign companies is something companies are interested in.’
‘Brexit vote may present opportunity for Ireland’