By Padraic Halpin
DUBLIN (Reuters) – Well over 100 financial-services firms that applied to set up or extend operations in Ireland because of Britain’s plans to quit the European Union have been authorized to do so by the Irish central bank, deputy governor Ed Sibley said on Thursday.
Banks, insurers and asset managers have spent the last three years moving operations to Dublin and other financial centers like Paris, Frankfurt, Amsterdam and Luxembourg to ensure they keep servicing clients in the EU’s single market after Brexit.
Ireland’s central bank had said at the end of January that it had processed more than half of its 100-plus applications, meaning a relatively small number are still outstanding before Britain’s scheduled departure from the bloc next month.
“We’re well over 100 authorizations or authorizations in principle where we’ve said you’re authorized subject to certain conditions, for instance putting capital in,” Sibley told Reuters in an interview at the central bank’s headquarters.
“We still have a number of applications that are in train, many will be completed before Oct. 31, some won’t… If they’re not authorized, they’re not authorized and we would expect them not to be taking authorized business.”
Sibley said most larger entities — which include Barclays (L:) and Bank of America (N:) who have set up EU headquarters in the Irish capital — are pretty much all approved, with “maybe one or two exceptions”.
Even with the influx, Sibley said he was confident no-deal preparations were in place across Ireland’s varied international financial services sector and that the system as a whole is robust enough to cope if Britain leaves without the cushion of a divorce agreement and a transition period.
Ireland is considered the remaining EU member most exposed to such an outcome, from the implications for its currently seamless border with British-run Northern Ireland to tightly intertwined trade with its nearest neighbor.
“The way I look at it is, given the kind of macro, political, societal impacts of Brexit on Ireland, it’s really important that the financial services system a) isn’t adding to the woes and b) continues to be there to support the business and the people who will require support after Oct. 31,” Sibley said.
“So from a system wide level, the shock will be significant enough but manageable.”
He said Ireland’s retail banks — which required the euro zone’s most expensive bailout after the 2008-09 financial crisis — were far more resilient a decade later from a funding governance, control and risk management perspective.
Regulators are pretty confident the banks will be ready operationally, he said, but an unruly Brexit will hurt a sector now almost wholly focused on the domestic market.
“I wouldn’t be concerned that we will have an overnight problem, it isn’t going to cause a massive financial stability problem. But it will be difficult for them, it will be damaging for the economy,” he said.
Sibley added that he has not seen any evidence to suggest changes were required in an upcoming annual review of the central bank’s mortgage lending limits, one of the measures put in place in recent years to increase that resilience.
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