Ladies and Gentlemen,
On behalf of the Federation of International Banks in Ireland (FIBI), I would like to welcome you to our annual lunch. We are especially honoured to have as our guest speaker, Joaquin Almunia, EU Commission Vice President and Commissioner for Competition. We look forward to hearing the Commissioner’s perspective on the issues as he sees them and on the way forward.
However, before we do, it would useful to provide a brief overview of the standing of the international financial services sector in Ireland since the launch of the International Financial Services Centre (IFSC) over 20 years ago.
International Banks in Ireland
As the representative body for international banks in Ireland, our Federation has 50 members including many of the world’s leading financial services institutions. While the IFSC plays host to a diversified range of players, banking plays a key role in facilitating and servicing the broad range of activities and sectors located here. We in turn are very active in and integral to the work of the Irish Banking Federation, to which we are affiliated.
The financial services industry is a very significant contributor to the Irish economy:
- Contributing over 7% of GDP;
- Paying tax of €1.4 billion – or over 36% of total corporation tax receipts;
- Employing 33,000 people here, of which 10,100 are employees of international banks;
- Accounting for $696 billion in cross-border banking assets – making Ireland the 13th largest market in the world;
- Accounting for the issuance of more than $1.2 trillion in international debt securities – up from only $70.3 billion ten years ago.
Ireland supports the full range of banking activities, including corporate and investment banking, funds industry services, asset management, corporate treasury, securitisation, leasing and asset finance, trade finance, and wealth management. Many operations provide services to other parts of their group – services as diverse as middle and back office operations supporting a trading operation, to management of group liquidity or management of group project and structured finance. New growth opportunities abound for existing activities as well as new areas of activity including green finance, Islamic finance, intellectual property and payments.
We are also becoming a key location for investment in financial services research and development (R&D).
In our own institutions many of us are working with colleagues in our parent organisations to identify further opportunities for locating and developing international banking services here. Competitiveness is key to the success of these initiatives.
Some Key Issues
In this regard it is particularly interesting to note from research we recently conducted among senior-level executives across our sector that Ireland’s competitiveness as a location for international financial services is seen as having improved significantly. Some 37% of respondents reported reduced costs over the previous twelve months, while for another 49% costs had stabilised.
This supports the National Competitiveness Council’s findings late last year that our cost competitiveness had improved because of, among other factors, downward price adjustments within the economy.
This trend is critically important for our business and it is vital that it continues – none more so than in the area of employment-related costs. Unfortunately, we are beginning to see some evidence that the tax element of employment is making it increasingly difficult for institutions both to retain and to attract highly-skilled people in an internationally-mobile labour market.
Our research also indicates a developing view that the regulatory approach here is becoming less attuned to the different circumstances of international financial services as opposed to domestic banking. Concern exists that the increased regulatory workload and the short timeframe for the provision of information and the implementation of new regulations is giving rise to a particularly heavy burden, especially for smaller institutions. It is indeed essential for all stakeholders in our industry that we have robust and effective regulation. However, it is also important that regulation is proportionate to the risk involved and the size of the institution in question.
The issues to which I refer briefly here are but a few of the many that are on our agenda at the present time. We remain fully committed to working constructively with our stakeholders at the national, EU and wider global levels to progress our positive growth-oriented agenda. We are fortunate in the professionalism and experience of our Secretariat and I would like to thank them on all our behalf for their work and commitment.
There continues to be considerable opportunity for us here in Ireland in our industry. We look forward to working together to realise the potential to our mutual benefit.
In the meantime, let me wish you a pleasant lunch and I trust that you will enjoy the opportunity to meet with colleagues and to listen later to the address from Commissioner Almunia.
Thank you very much.
Note: As the voice of international banks in Ireland, FIBI is affiliated to the Irish Banking Federation.