John Bruton calls for ‘rein’ on financial regulation
President of the IFSC warns that a lack of coordinated European regulation could impact Ireland’s financial services industry
Former Taoiseach John Bruton, Chairman of IFSC Ireland pictured speaking at the 2013 European Insurance Forum in Dublin. Photograph: Aidan Crawley
John Bruton has called for a “rein on regulation” in the financial services industry.
Mr Bruton, a former taoiseach and the president of IFSC Ireland, told the European Insurance Forum conference in Dublin that the industry needs to focus on ethics rather than regulation and the financial services industry in Ireland could be endangered by the lack of an European banking union.
IFSC Ireland represent trade, industry and professional organisations and aims to encourage activity in international financial services centre.
“We need to put a rein on regulation. Regulation isn’t a substitute for ethics, regulation isn’t a substitute for morality, regulation isn’t a substitute for trust. It may help create all of those but will never and we can never expect it to substitute ethics, morality and trust,” he said.
The statement follows comments by AIB deputy chairman Dr Michael Somers that too much regulation is causing financial services companies to leave the IFSC, after Goldman Sachs returned its banking licence to the Central Bank this year.
The outgoing deputy governor of the Central Bank and current financial regulator Matthew Elderfield defended regulation at the same conference on Thursday. He said arguments for less regulation should be given “short shrift if they take place as a vaguely articulated concern about burden and competitiveness without being grounded in specifics to ensure an informed debate”.
Speaking afterwards Mr Bruton said, “I am aware that some banking groups have handed back their licences because of heavy regulation. Regulation is too risk averse and that’s why I emphasise . . . the importance of a European banking union.”
He added that without more streamlined regulation some activities could move abroad.
“Without a single European resolution system for banks and a single European deposit insurance system there is a risk that certain risky activities will only be able to operate in countries with very big tax bases. That would of course be a complete distortion of the internal market so we need a European system to give Ireland a chance, and to give other smaller jurisdictions a chance, of having some of the [banking] activities serving the whole of Europe.”