IFSC criticised as not fit for purpose

The State’s top civil servant has told the group that oversees the development of the Irish Financial Services Centre that its structures and workings are not keeping pace with the huge changes in the sector and “it was clear that something must be done”.

Martin Fraser, Secretary General of the Department of An Taoiseach, chairs the IFSC Clearing House Group, the membership of which is made up of senior figures from the financial service industry and senior officers from Government departments and State agencies.

He told the most recent meeting of the group in May that the strategy for the financial services centre was now a few years old and tracking its implementation may have become an issue. It is the first time since minutes of this controversial group have been published that Mr Fraser has made such strong critical comments querying the direction of the IFSC and the structures of the Clearing House Group itself.

Criticised
The group has been criticised in the past for giving the financial services industry a level of access to central Government that no other sector has.

At the meeting in May, Mr Fraser asked the financial sector to put forward three representatives to meet with three public sector representatives to “discuss the future for the industry”, according to the minutes.

A core element of the Government job strategy is its commitment to create 10,000 jobs in the IFSC by 2016. While the IDA has said it is on track to achieve that target, there have been some significant job losses in the centre in recent years as a result of global contraction in financial services.

At the Clearing House group meeting last May, the 23 members present discussed a position paper written by an Assistant Secretary in the Department of Finance, Neil Ryan. Mr Ryan's document argued the IFSC's strategy and "offering" needed a radical rethink.

Minutes of the meeting published on the Department of An Taoiseach’s website state that Mr Ryan said the clearing house group, as well as the strategy, were stale and not capitalising on where things are going in the future. The minutes state: “He expressed his opinion that unless something changed Ireland would be likely to lose jobs to its competitors.

"He told the group of his belief that there should be a new ambitious, coherent, and co-ordinated plan which all relevant stakeholders would buy into in order to rebrand and market the industry to build on the skills and expertise already available there."

Product offering
Tim Hennessy of Axis Capital said the industry needed to differentiate itself and define its product offering, and suggested looking at specialising in a subset (or niche). Deirdre Somers of the Irish Stock Exchange said the sector needed to be far more definitive than it currently is. Another member of the group, Paul McGowan, chairman of the IFSC funds working group, said there was a weakness in the implementation of the strategy and supported the Clearing House Group being restructured. He pointed to the model developed for the food industry and said it might be interesting to look at.

The minutes said: “The chairman [Mr Fraser] noted it was clear that something must be done. He expressed his view that Food Harvest 2020 was an interesting model with a clear strategy, targets and branding behind it.”

Among group members in attendance were senior figures from KPMG; Axis Capital; Pioneer Investments; State Street; Belfius; the Irish Stock Exchange; FSI; the IDA; the Central Bank; Revenue and Enterprise Ireland.